Current news for this fund:

Solent Capital Partners LLP, Mainsail II - MBS, CDOs (SIV-lite)


Count of distinct funds: 1
Capital base: $1.5 billion
Loss: ?

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Update, Sept. 9, 2007: We are moving Mainsail II to "imploded", as per the Marketwatch article and other sources pointing out that the fund is being wound down. The article points out that the $500 million+ in emergency funding provided by Barclay's expired in July, and it wasn't clear if it was extended.

Original post. Mainsail II, a fund under Solent Capital Partners LLP based out of the U.K., has reportedly been forced to sell assets according to a Bloomberg article:

Solent Capital Partners LLP, the U.K. manager of $8.8 billion in hedge funds, may be forced to sell assets in a unit that buys mortgage-backed securities after lenders refused to provide short-term funding.

Solent's Mainsail II Ltd. fund joins issuers including Countrywide Financial Corp., the biggest U.S. mortgage lender, and Toronto-based Coventree Inc. that have been denied financing as rising defaults on subprime loans erode investor confidence in securities backed by mortgages. Yields on the debt soared on Aug. 17 by the most since the Sept. 11, 2001, attacks.

Mainsail II is drawing on emergency bank loans after failing to sell asset-backed commercial paper, or short-term IOUs, the fund said today in a statement. Mainsail II, which was set up by London-based Solent last year, issues the debt to invest in longer-dated assets such as mortgage-backed bonds.

Companies are finding it "difficult to get the cheap funding they're used to," said Priya Shah, a structured credit analyst at Dresdner Kleinwort in London. "We will see more of these."

The article goes on to note that Barclays has committed to provide around a half a billion in emergency funding to Mainsail II.

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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.