Archeus Capital, a highflying hedge fund that just a year ago had assets of $3 billion, told its investors yesterday that it would close.
The closing of the fund, which was founded and run by two former bond traders from Salomon Brothers, highlights how sensitive hedge fund investors have become to weak performance after last month’s blow-up of Amaranth Advisors. Amaranth is shutting down after a series of bad bets on natural gas.
Like Amaranth, Archeus was a multistrategy fund, although one with a more conservative approach that focused on exploiting arbitrage opportunities in convertible bonds. Archeus, based in Manhattan, began experiencing redemptions last year after its main investment strategy fell out of favor.
