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Autonomy Capital Research, LLP | Hedge Fund Tracker Notes

Autonomy Capital Research

Autonomy Capital Research, LLP | Notes

The following piece on Autonomy Capital Research, LLP is being published as part of our Hedge Fund Tracker Tool, our daily effort to track hedge funds in the industry.

Resource #1: (11.5.08) Autonomy Capital Research LLP, a $1.7 billion hedge-fund firm run by former Lehman Brothers Holdings Inc. trader Robert Gibbins, halted withdrawals from its flagship fund after losses this year.

The $1.2 billion Autonomy Capital Fund slumped about 40 percent this year through October, according to a Nov. 3 letter sent to investors. The London-based firm said margin and financing rates are rising, making asset sales in falling markets undesirable.

Hedge funds are reeling from the worst financial crisis since the Great Depression, with losses averaging 20 percent this year, according to data compiled by Chicago-based Hedge Fund Research Inc. Blue Mountain Capital Management LLC and Deephaven Capital Management LLC are among the funds that stopped redemptions after clients sought to withdraw money.

``Redemptions at this time could be materially adverse to the best interests of the fund,'' Gibbins, 39, chief executive officer of Autonomy, said in the letter, a copy of which was obtained by Bloomberg News.

Autonomy is a global macro fund, which seeks to profit from broad economic trends by trading stocks, bonds, currencies and commodities. Such funds returned 1.29 percent this year through October, according to HFR.

Most of the pending redemption requests are scheduled to be paid in the second quarter of 2009, Autonomy said. The firm will present a restructuring plan in the coming weeks, its client letter said. Jonathan Gasthalter, a spokesman for Autonomy, declined to comment.

Loss of Confidence

Investors worldwide may pull as much 25 percent of their money from hedge funds by the end of the year, Morgan Stanley said in an Oct. 24 report. Combined with investment losses, industry assets may shrink to $1.3 trillion, a 32 percent drop from the peak in June, the New York-based bank said.

``I expect this to continue as investors lose further confidence in the hedge-fund space,'' said Jeremy Walton, head of the fund disputes group at Bermuda-based law firm Appleby. Source

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