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Niederhoffer Matador Fund - US Equities (trading-centric)

2007-10-10

Count of distinct funds: 1
Capital base: ?
Loss: ?

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stories: wsj.com

Famed trader Niederhoffer has closed his company's Matador fund, after steep losses and withdrawals. We believe the fund managed a few hundred million dollars worth of assets, but have not received a specific figure. Here are some excerpts from the WSJ article on the implosion:

Last month, Mr. Niederhoffer's largest hedge fund, Matador Fund Ltd., was liquidated after suffering losses of more than 70%, according to people close to the matter. Adding to Mr. Niederhoffer's problems, according to a person close to the firm: Swiss-based Octane, a fund-of-funds firm that invests in hedge funds, pulled a significant amount of money from the firm.

...

In recent years, Mr. Niederhoffer, 63 years old, had staged something of a comeback, relying on a trading style that generally bets on rising markets and quick trades and is characterized by wild swings. Last year, for example, he saw the Matador Fund, based in Weston, Conn., lose 30% of its assets early in the year, but stage a rebound to finish with gains by year's end.

The turndown was sudden. As recently as Aug. 26, Mr. Niederhoffer, who earlier this year managed almost $300 million, said Matador was stable, despite traders' speculation that losses were heavy and investors were fleeing. "We have accomplished what we intended to do in connection with recent [withdrawal] requests and have an ample surplus in all respects," he said in an email at the time.

We are also unsure if other Niederhoffer funds were effected. If you have any additional information, please let us know.

An extensive background article on Niederhoffer is available here.

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Important: This fund is on our list of hedge funds that have "imploded" (see also ailing lenders). However, please note that "imploded" is a somewhat subjective. The "imploded" list contains hedge funds (or other unregulated and autonomous speculative investment funds) which have gone through some sort of permanent adverse change. This is a somewhat subjective call, and does not necessarily mean total shutdown or bankruptcy. It can also mean steep and rapid mark-downs in net asset value; or abnormal "bail-out" by corporate parents or peers in order to avoid write-downs and provide liquidity. The funds are of any type and sector.