Hedge Funds

Whitebox suspends redemptions


Whitebox Advisors has suspended redemptions from most of its hedge funds to protect investors from the potential damage that could be caused by prime brokerage margin increases.

Earlier this month, one of Whitebox’s prime brokers, Goldman Sachs, doubled the margin requirements for the firm’s convertible bond book, which has suffered big losses, according to two Whitebox investors.

Whitebox, which managed over $4 billion at the end of September, is understood to have had enough reserves to meet Goldman’s requirements. However, given indications from other prime brokers that they might also move to tougher terms, Whitebox made the difficult