Vega Asset Management LLC, the USD 12 billion hedge fund manager, warned that it expects to suffer further redemptions.
The hedge fund had redemptions in September equal to 4% of total assets, while the company said it is also expected to have 4% redemptions in October.
In response to a spate of recent media reports about Vega's performance suggesting the returns of many of its funds are in negative territory this year after two months of underperformance, Benjamin Mann, managing director at the hedge fund, said the fund will not face a liquidity crisis.
Mann was speaking at the Hedge 2004 conference in London this week. He said: "We can have massive redemptions and it would not be a problem for us because our portfolios are so liquid…Our relative value fund is 50% vested in cash. If you have massive redemptions, you get a month or so to scale down your portfolios."
Mann revealed that recent losses had been caused by a bet in the US Treasuries market that went wrong.