GO Capital Halts Redemptions From Global Hedge Fund

(Bloomberg) -- GO Capital Asset Management BV blocked clients from withdrawing cash from its Global Opportunities Fund, at least the seventh hedge fund in the past month forced to take steps to protect itself from falling markets.

Frans van Schaik, the former head of equity research at ABN Amro Holding NV who founded the Amsterdam-based fund in 2000, wrote to investors that the fund is not leveraged and not facing margin calls. The fund, which bets both on rising and falling prices, has assets of about 570 million euros ($881 million).

``A temporary suspension of redemptions is the best defensive measure to protect the interests of the participants,'' van Schaik and other members of GO Capital's management said in a letter posted on their Web site and dated March 11. ``Current market circumstances do not allow the fund to sell investments at a reasonable price.''

At least six hedge funds totaling more than $5.4 billion have been forced to liquidate or sell holdings since Feb. 15 as contagion from the U.S. subprime slump spreads for a seventh month. Others include Peloton Partners LLP's $1.8 billion ABS Fund, Tequesta Capital Advisor's mortgage fund and Focus Capital Investors LLC, which invested in midsize Swiss companies.

GO focused mostly on listed European equities, although it was not restricted in investments it could make, the Web site says. The fund planned to make bets on between 10 and 30 stocks and looked for ``situations of overreaction or stress,'' according to the Web site.

 

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