Hedge fund SageCrest files for bankruptcy

Date: Tuesday, August 19, 2008
Author: Emily Chasan, Reuters

Hedge fund SageCrest Finance LLC, which once invested roughly $900 million, has filed for Chapter 11 bankruptcy protection.

The Greenwich, Connecticut-based fund, managed by Windmill Management LLC, describes itself as a "credit opportunity fund" that provided short-term debt to companies, according to its website. People familiar with the fund, which once counted Russell Investments among its clients, said it has has been battered by losses in the debt markets plus mounting lawsuits.

In its bankruptcy petition filed on Sunday in U.S. bankruptcy court in Connecticut, the fund listed assets of $50 million to $100 million and debt in the range of $1 million to $10 million.

SageCrest is the latest in a growing number of hedge funds to face losses in the wave of soured bets in the credit market. In the first seven months of the year, the average hedge fund lost 3.54 percent and managers and investors at various funds have said that many clients are pulling their money out of these portfolios.