United Capital Markets Holdings Inc.: Horizon Strategy - Subprime ABS

Bloomberg reported on July 2^nd that United Capital Markets Holdings (or "UCMH") had halted redemptions on certain hedge funds residing in their Horizon Strategy group. The article reports:

The funds are within the company's Horizon Strategy group, including the Horizon ABS Fund LP, said Michael Gregory, a spokesman for the Key Biscayne, Florida-based firm.

"We did that as a defensive move because we had an unusually high number of redemption requests and we didn't want to be a forced seller in this market," Gregory said in a telephone interview. One of the redemption requests was from an investor who had put up about 25 percent of the funds' money. ...

The Horizon ABS offshore fund lost 5 percent from March 31 through the end of May. The fund gained almost 40 percent last year. ...

Based on what we were hearing about the lack of liquidity and absence of bidders in the market, it's hard to fathom that these securities weren't worth less back in March, April and May," Parker said. "These positions didn't get marked down until June. Nobody's hand was forced in the market until then."

Update, August 18, 2007: A MarketWatch article lists the effected funds as Horizon Fund L.P., Horizon ABS Fund L.P., Horizon ABS Fund Ltd. and Horizon ABS Master Fund Ltd., and has more background on Devaney's shop.

We also found this article (there are many others like it) which points out that Devaney, who had significant amounts of money invested in the funds (to his credit), has had to put up many of his personal luxury assets for sale (helicopter, 142-foot yacht, mansion in Aspen, etc.). Will Devaney be able to bail out his funds with his (his family's?) own money? Stay tuned to find out.