(1888PressRelease)
March 01, 2008 - The fund had created an 87 per cent return in 2007 but said in a letter to investors that it was facing liquidity problems, and added that other funds were in the same position.
Peloton, founded by former Goldman Sachs partners Ron Beller and Geoff Grant in 2005, is seeking buyers for the fund's assets, it said.
A letter stated that "severe" problems stemmed from mortgage-backed debt and demands from banks to repay loans.
"The problems for the Peloton ABS Fund have had a serious negative impact on the Multi-Strategy Fund and we are currently assessing our options," the letter said.
Nigel Blanshard, a partner at London-based Culross Global Management, told Bloomberg: "The rubbish goes down first and then the good stuff is pulled down with it.
"The flight to quality this year has been to get out of mortgages altogether."
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