Skip to main content
Publish date:

Amaranth Sells Off Assets

The hedge fund also halts withdrawals, according to reports.

Troubled hedge fund

Amaranth Advisors

late Friday told investors that it will liquidate all of its remaining investments and that it has temporarily suspended redemptions to help it raise money from sales of its assets.

According to published reports, hedge fund founder Nick Maounis said a letter to investors that the company would dispose of the remaining positions in the funds' portfolios to "enable the Amaranth funds to generate liquidity for investors in an orderly fashion, with the goal of maximizing the proceeds of asset dispositions."

The hedge fund, which had assets of $9.2 billion at August end, lost $6.5 billion in less than a month and $4 billion in a week on failed natural-gas bets.

The hedge fund's death spiral

began earlier in September, when Amaranth sent a letter to investors saying it had lost billions. The majority of the losses were attributable to energy trader Brian Hunter.

When news of the losses spread, investors began demanding their money back.

Though it is unclear how much money investors will be able to recoup,Maounis wrote that Amaranth's "current intention is ... to make periodic cash distributions to investors on a pro rata basis."

According to Friday's letter, assets were down 65% to 70% for the month and 55% to 60% for the year. Amaranth began the year with $7.5 billion, spiraling down to less than $3 billion Friday.

TheStreet Recommends

A spokesman for the fund declined to comment beyond the letter, reports say.

Earlier Friday,

The Wall Street Journal

said that


(C) - Get Citigroup Inc. Report

reportedly ended talks over possibly taking a stake in Amaranth.

Speculation had been growing on Wall Street that it

was only a matter of time before Greenwich, Conn.-based Amaranth closed up shop.

In addition to selling its energy portfolio, the hedge fund has been selling stocks and liquidating its holdings in dozens of

so-called blank-check companies.