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Hedge fund guru in trouble again

Date: Monday, April 28, 2008
Author: David Teather, Guardian.co.uk

ohn Meriwether, founder of the hedge fund Long-Term Capital Management which imploded at the end of the 90s, has run into trouble with his latest business.

His current hedge fund, JWM Partners, gave investors in its JWM Global Macro fund the option of withdrawing money ahead of the redemption period after it fell in value by 14% in the first three months of the year. According to the magazine Hedge Fund Manager Week, principals at the fund contacted investors last week, giving them the option of pulling out cash.

The firm's leading product, Relative Value Opportunity fund, fell by 31% in the first quarter of the year.

A number of hedge funds are struggling with increasing redemptions and drops in assets under management, due to poor returns in the current climate.

Meriwether began his career as a bond trader at Salomon Brothers in the early 1980s, becoming vice-chairman before founding LTCM in 1994, where he was regarded as a brilliant and fearless trader until disaster struck in 1998. Meriwether set up JWM, based in Greenwich, Connecticut, in 1999.

The Global Macro fund takes directional bets on the likes of currencies and interest rates and had $380m under management at the beginning of the year. JWM has a total of $1.6bn under management.

JWM would not say how many investors had pulled out of the fund.