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Gradient Capital Partners - leveraged equity plays?

Count of distinct funds: 1
Capital base: $2.5 bn at peak
Loss: 63% YTD end of Sept.

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stories: co.uk

Things are looking grim for U.K.-based Gradient Capital Partners. One of London's "best known hedge funds" is down some 63% on the year (through September we gather) according to the Telegraph, with a whopping 42% of that drop occurring in the last month.

Though the article makes no mention of investors seeking redemptions, words like "blow up" and "resuscitate" are being used to describe Gradient's current condition. Indeed:

Yesterday, sources close to the fund insisted that Mr Farman and Mr Pagel are determined not to close Gradient but are instead working on ways to resuscitate the business.

Gradient's less-than-stellar performance stands in stark contrast to the firm's solid results in recent years past: 56% and 47% in 2005 and 2006, respectively.

We can't help but think that hopes to bring this fund back to life may be misplaced — being 63% down means they'd need more than a 100% return from current levels to get back to break-even!

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Important: This fund is on our list of hedge funds that are apparently ailing or which we think are worth watching for any other reason. Ailing funds haven't shut down, but they've suffered significant value declines and/or temporarily halted redemptions. Funds on watch may not even have unusual declines, but may be posted if it is felt there may be risk of developing a more serious condition eventually.