Highbridge Investors Flee Fund, Hurting JP Morgan Chase

We knew Highbridge was hurting but this morning’s report from the Wall Street Journal’s Jenny Strasburg makes it clear how badly: investors have asked to withdraw 36 per cent of the assets from its flagship fund. That not only will deprive JPMorgan Chase, which owns 75% of Highbridge, of hundreds of millions of dollars in fees; it could result in further losses to the fund as it scrambles to sell positions into a rocky market.

  • Highbridge is cutting its fees. It once charged an astronomical 25% of profits. Now in an attempt to woo back investors and hold off redemptions, it is reportedly slashing tose feels.
  • Closing the gates. In order to reduce the damage to its portfolio from forced sales, Highbridge is requiring investors to wait up to year to recover money they have withdrawn.
  • Flagship is half the fund it used to be.  After losses and redemptions,  the flagship multi-strat  fund could be worth only $6 billion, down from $15 billion at its pinacle.
  • Decline and Fall. Overall, Highbridge funds are said to have shrunk from $38 billion in 2007 to less than $20 billion now.

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