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Vega says Select hedge fund down 16.7 pct in 2006
Thu Oct 5, 2006 12:57 PM ET



NEW YORK, Oct 5 (Reuters) - Vega Asset Management, formerly one of Europe's top hedge fund managers, on Thursday told investors that its high-profile Vega Select Opportunities fund is down 16.7 percent year-to-date through September, according to an investor letter obtained by Reuters.

Vega also said the Select fund suffered a net loss of 10.6 percent for September, mainly from "short" positions in U.S., European and Japanese fixed income securities.

"In the second half of the month, the fixed income markets experienced sharp rallies," said Vega. It didn't disclosed its assets under management.

"Clearly we and the portfolio manager are not pleased with the recent performance of the Vega funds and are determined to return Vega's performance to the top tier of global fund managers," the letter signed by Vega Securities President Michael Mann said.

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Vega facing withdrawals after steep losses
By Anuj Gangahar in New York
Financial Times


Updated: 10:42 p.m. ET Oct. 4, 2006
Steep trading losses at Vega Asset Management, an embattled hedge fund firm, may lead some investors to withdraw money, cutting its assets to as low as $1bn, from a peak of about $12bn.

Hedge fund industry insiders said a Vega bet on bond prices had sparked redemptions and inquiries about withdrawals from some fund of hedge fund investors. Ben Mann, a spokesman for Vega, said: "It is not the case that redemptions for this month are material or that they have added to trading losses." But Mr Mann said he expected redemptions, although it was "too early to speculate about these".

The investors' actions, coupled with Vega's losses as a result of a losing bet on the direction of Japanese, US and European bonds, which have rallied recently, have seen the fund's assets sink.

Sources familiar with the firm said assets could be as low as $1bn, while others said it still had several billion dollars under management. Two years ago it had $12bn under management.

Mr Mann said it was not Vega policy to comment on the size of assets except to shareholders.

He added: "We are a very substantial organisation and expect to remain so." He neither confirmed nor denied that assets were now at about $1bn but said the firm had no intention of winding down. A London-based fund of hedge fund manager said: "I would not expect them to disappear." He added: "You have to remember that this is a fund that has at least three years of perfect returns. There is no reason to believe that a fund such as this that is down one month will necessarily be down the next."

Until recently Vega was one of the success stories of the hedge fund industry as its assets under management surged five-fold in less than two years. It is based in Madrid and New York. But Vega recently reported its first calendar year of negative returns after nine years in business.

Many investors believe the best lifespan for a single manager hedge fund is five years, after which many managers are thought to be past their peak for various reasons including a lack of fresh ideas.

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Vega hedge fund facing withdrawals after steep losses
By Anuj Gangahar in New York

Published: October 5 2006 03:00 | Last updated: October 5 2006 03:00

Steep trading losses at Vega Asset Management, an embattled hedge fund firm, may lead some investors to withdraw money, cutting its assets to as low as $1bn (£530m), from a peak of about $12bn (£635m).

Industry insiders said a Vega bet on bond prices had sparked redemptions and inquiries about withdrawals from some fund of hedge fund investors. Ben Mann, a spokesman for Vega, which is based in Madrid and New York, said: "It is not the case that redemptions for this month are material or that they have added to trading losses." But Mr Mann said he expected redemptions, although it was "too early to speculate about these".