Current news for this fund:

Windmill Management (SageCrest funds) - "credit opportunity" (art, property, legal lending)


Count of distinct funds: 2
Capital base: $1b+ in SageCrest II, the largest fund (as of last year)
Loss: SageCrest II reportedly down by half; principal loss vs. withdrawals unknown

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Update, 2008-09-03

For more details on the bankruptcy, see this NYPost article and this one from Dow Jones.

Update, 2008-08-19

FinAlternatives clarifies that both SageCrest funds, SageCrest Finance and SageCrest II had bankruptcy filings.

A source also tells us that Deutsche Bank is not the prime driver moving the funds into bankruptcy, as loans from that bank to SageCrest would still leave them a senior creditor.

Implosion, 2008-08-18

SageCrest has filed Bankruptcy. It is unclear which or whether all of the funds or the entire group are covered.

Original Ailing Writeup, 2008-06-12

This fund group came to our attention due to a lawsuit regarding alleged shady (if not fraudulent) activities:

A US hedge fund manager facing a lawsuit for blocking withdrawals is now being accused by one of its long-standing investors of “siphoning off” money.

Windmill Management, which runs the SageCrest and SageCrest II funds specialising in loans for art, property, and personal injury lawsuits, was sued this week by Westerly Capital on behalf of other investors in its first fund.

The case is unusual in the world of hedge funds, where claims of deliberate wrongdoing by managers are usually picked up first by regulators. Investors are often reluctant to reveal their losses in public for fear of embarrassment, keeping them out of the courts.

The FT article has more about Windmill and the situation it is in with its funds:

More about the fund and the situation it is in:

The first SageCrest fund is relatively small, and the lawsuit is likely to be more of an annoyance to Windmill at a time when it is struggling with an almost halving of the value of the second fund, which reached almost $1bn under management last year.

But it could prompt further concerns among investors in the larger fund, many of whom have already complained about a block on withdrawals and big falls in value. Last month Wood Creek Capital Management, a US fund of hedge funds, sued Windmill for $5.8m it claimed had been promised in repayment but had never arrived. The fund was also pulled into a tangle of legal actions in New York over loans to buy art where Christie’s accused a gallery of trying to rig an auction.

SageCrest II has sold many of its assets at a steep discount to raise cash partially to repay loans from Deutsche Bank and Bear Stearns, and has been trying to secure a $150m emergency loan from fund manager Fortress Investment Group.

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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.