Thursday, November 29, 2007

Carlyle's Blue Wave Hedge Fund Loses 9.3% Since March

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From Bloomberg:

Blue Wave, the hedge fund started by Carlyle Group in March, lost 9.3 percent this year after credit investments backfired.

The fund, overseen by former Deutsche Bank AG executives Rick Goldsmith and Ralph Reynolds, was hurt in October by bets on structured credit, which can include securities backed by repackaged home loans, according to an investor who declined to be named because returns are private. It had $690 million in assets as of Sept. 30, according to a client letter obtained by Bloomberg.

Blue Wave's decline since March compared with the 10 percent average gain by hedge funds globally and the 6.7 percent return by multistrategy funds that bet on price differences between stocks, bonds and other securities, according to Chicago-based Hedge Fund Research Inc. The losses made Washington-based Carlyle, the world's second-largest buyout firm, vulnerable to client redemptions in its first hedge fund....MORE