HedgeCo.net – Hedge Fund Ritchie Capital Management, as part of a liquidation plan, is selling a significant portion of its assets in its Multi-Strategy Fund for $1 billion to New York City-basedReservoir Capital Group.

Ritchie Capital, which oversees about $2.8 billion including borrowed money, will liquidate its Multistrategy Global Fund and return cash to investors. The company told investors that the RitchieCapital Management flagship multi-strategy hedge fund had about $730 million in assets in mid-2006.

Thane Ritchie, founder of Ritchie Capital said in a statement, “We are pleased that investors have approved this transaction as it is a significant first step in meeting our stated objectives for theMulti-Strategy Fund – preserving the value of its assets and returning capital to redeeming investors,…..However, we recognize that we need to continue to work diligently and intelligently tocompletely fulfill our commitment to all our investors.”

After facing an extended period of under performance and investor demands for capital returns, the hedge fund has been in exclusive talks with Reservoir and Coller for several months to buy theflagship fund, sources have said. The sale is the first of what Ritchie Capital Management expects will be a series of transactions for the remainder of the fund’s assets. At the end of 2004, Ritchielost more than 2% of its flagship fund and decided to alter it to a traditional, more liquid one to one that incorporates private equity and longer-term investments.

Alex Akesson
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net