Epic Limited Partnership - Canadian mid-cap

This Canadian hedge fund run by Epic Capital Management is the main fund at that outfit. As they were hit by redemptions, they made a decision to shut down, as the fund would mostly be left with undesireable and illiquid "silt" after selling off the "cream" to meet the redemptions. Additional details follow:

If Epic investors approve the closing, they should get about 80 per cent of the money they are entitled to by early next year, and the remainder as Epic unloads tougher-to-sell investments, Mr. Fawcett said. The firm, which had three partners and six employees, is letting five workers go.

Epic had already sold most of its stocks and moved 75 per cent of its assets into cash.

Regarding performance:

Epic's performance is in line with many of its peers, suggesting other funds may not be far behind. More than a dozen Canadian hedge funds are down over 40 per cent this year - meaning they have had a bigger drop than the country's benchmark stock index.

The declines have undermined the rationale for investing in hedge funds, which were pitched based on their supposed ability to generate positive returns in any market.

Epic's move also affects the $35-million Arrow Epic Fund, which it runs as an external manager for Toronto-based Arrow Hedge Partners Inc. That fund, which plunged 45 per cent this year as of last Friday, is also being wound down.

These points suggest to us there will be more of this.