Reuters reported yesterday that according to Satellite Asset Management’s website (currently down), they have closed their fund and attributed it to “client withdrawals”.

Satellite Asset Management LP, a $2.8 billion (1.84 billion pounds) hedge fund founded by former employees of billionaire George Soros, is closing down because of client withdrawals, Bloomberg said on its website late Friday.

The New York-based firm has started returning money to investors from its three funds, Satellite Overseas Fund Ltd, Satellite Fund II LP and Satellite Credit Opportunities Ltd, the report said, citing a person familiar with the matter.

The three funds oversaw $2.8 billion in client assets, the report said.

Late last year Satellite Asset Management halted redemptions and  laid off 30 of their employees.

Satellite Overseas Fund Ltd., Satellite Fund II LP and Satellite Credit Opportunities Ltd. have declined as much as 35 percent in 2008, said a person with knowledge of the funds’ performance. Simon Rayler, Satellite’s general counsel, declined to comment and wouldn’t disclose how many people remain at the firm’s New York headquarters or London offices. Satellite oversaw about $7 billion for clients at the end of last year.

…

The company has received withdrawal notices, which are effective through June, for 21 percent of the $2 billion Satellite Overseas Fund Ltd., its largest fund, the person said.

Satellite has cash to meet current redemptions and will continue to run the funds and sell securities over a period of years to avoid unloading them quickly in slumping markets, the person said.

After a couple months of freezing redemptions, Satellite Asset Management tried a compromise and allowed investors to redeem 30 cents on the dollar invested or reinvest the entire amount with 2, 3, and 5 year lockups. The entire letter was made public by dealbreaker.com. Unfortunately this still was not enough to keep the fund running.

RIP Satellite