Collapse of hedge fund could cost Corazon millions

Monday 30th March 2009, 2:30PM BST.

0533083 A GUERNSEY company stands to lose millions as a result of the collapse of a leading hedge fund.

Investment manager Corazon Capital’s exposure to Weavering Capital represents just under 3% of its firm’s client assets.

And with the UK’s Serious Fraud Office and Financial Services Authority considering whether to start an investigation into the collapse of Weavering Capital, Corazon Capital could become the first Guernsey-based organisation to be caught out to such a large extent by an alleged global fraud.

At the end of January, Corazon Capital, which also operates from Jersey and Switzerland, said it was responsible for more than $1bn of assets under management in discretionary portfolios, institutional mandates and multi-strategy funds of funds.

Weavering Capital recently went into voluntary administration after its Weavering Macro Fixed Income Fund, which had been valued at more than $500m., was put into liquidation.

The fund was in a number of Corazon Capital’s client portfolios and funds, according to group chief executive Paul Meader (pictured), who is also a prominent figure in the local finance sector.

He added that the collapse would also affect ‘a handful’ of Guernsey investors.

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View more: Corazon news, Paul Meader news.

1
Paul Revere

March 30, 2009 at 4:49 pm

I’d love to know how robust their due diligence procedures were on that particular hedge fund.

Is the fund of hedge fund manager model a busted flush?

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2
spencer

April 1, 2009 at 3:21 pm

Not so innocent
As long as financial managers in Guernsey and elsewhere refuse to be accountable for their decisions we remain stuck in the ‘who done it’ culture of this Island. Sure we can criticise others but the ‘buck’ never stops.
Yes, red faces over the Landsbanki affair – thanks to the omission of depositors’ insurance – have be caught out with tragic repercussions. If this were Japan a person would have forfeited their job.
Concerning the investment industry, I have not read in this article what kind of insurance Corazon holds for the protection of its clients who have transferred their saved money into the hands of those that they trusted. Yes, we humans are not perfect and both investors and highly trained investment managers make errors. The later are more than familiar with insurance coverage that would let them sleep better and provide their investors with confidence, but not in Guernsey.
Regulations are necessary but are basically a bean counters antidote to investigating prospective investments in a different way. As long as we stay within the rules we commit the sin of belief that the earth is flat.

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