Following private equity into deals, hedge
funds now find themselves stuck with losing propositions
By Pete Gallo
Collapsed leverage buyouts are taking their toll on some
big-name hedge funds that have followed private equity into the
top dozen deals that have come undone.
Funds affected by the LBO fallout include D. E. Shaw,
Citadel Investment Group, Farallon Capital Management, Marathon
Asset Management, Gabelli Funds, Stark Offshore Management,
Satellite Asset Management, Maverick Capital, Third Point and
Silver Point Capital.
With the stock market teetering and credit still scarce,
investors think it's too early to say the troubles are over.
"The situation with many of these [target] companies seems to
have stabilized, but with the high level of uncertainty, marked
by daily volatility in the equity markets, there are clearly
continuing challenges on the road ahead," says Ernest Boles,
chief executive of Auda Group, a $5 billion fund-of-funds
Auda is cautiously...