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‘Vultures’ Eyeing Portus Corpse


Date: Friday, October 6, 2006
Author: Dailyii.com

All told, investors in defunct Canadian hedge fund Portus Alternative Asset Management haven't done too badly, compared to other hedge-fund blowups. Court-appointed bankruptcy trustee KPMG expects investors to eventually get about C$0.86 on the loonie. Unfortunately for investors, eventually may mean three-to-five years, as much of the money is tied up in Société Générale notes that don't mature until then. Now, KPMG is warning investors who want their money now to beware of so-called  "vulture funds" seeking to pick up their claims at a discount. According to KPMG, three U.S. hedge funds, Davidson Kempner Capital Management, PrimeShares World Markets and Silver Point Finance  are looking to do just that, and have acquired a list of Portus creditors. The Independent Financial Board of Canada is advising Portus claimants to seek independent tax advice before selling, but is warning advisers who recommended Portus to their clients to stay out of the business of advising on this. In our view, it is not advisable for advisers to provide such advice, as there are many outstanding issues [that] would need to be taken into account before an informed decision is made, said Susan Allemang of the IFBC.