SARS Slows Client Activity for Canadian Firm

Date: Friday, June 20, 2003

The SARS epidemic in Canada was a drag on business development for Leeward Hedge Funds Inc. amid good performance for its Bull and Bear funds, according to officials for the company. With SARS infections slowing, Brendan Kyne, president of Leeward, said that a number of allocators postponed their on-site visits to Toronto as a result of the scare, making it more difficult for potential investors to perform due diligence. In addition, the city itself has been hit by a drop in tourism, which is affecting the retail and hospitality industries, he said. The timing was somewhat poor for Leeward, which says it has gotten good performance from its hedge funds. Like some other managers, they’re expecting a rally in the natural gas market. “We are very bullish on natural gas,” and have a heavy concentration, about 20%, in energy, Mr. Kyne said. But despite the SARS problem, based on current indications of interest in their hedge funds, its assets under management—currently US$60 million—are expected to grow quickly in coming months. “We think assets will double by November,” said Robert Klein, vice president of sales. Current flows are coming as a result of discussions that took place in October, he said.