From: Reuters
Published April 29, 2008 12:38 PM

Meriwether's hedge fund let investors out, staff go

BOSTON (Reuters) - Hedge-fund manager John Meriwether is letting investors exit his global macro fund after the roughly $300 million portfolio lost 14 percent this year, a person familiar with the fund said on Tuesday.

The nearly 30 investors in the 5-year-old JWM Global Macro fund, which makes big bets on currencies, stocks and bonds, will have a chance to get their money out immediately after an escape clause was recently triggered, the person said, explaining that investors have long had this right to exit.

Often hedge funds lock up their investors' money for months -- or even years -- and getting cash out can become difficult.

But at JWM, this exit is unusual only in that the fund's poor performance triggered an provision that allows investors to exit after the fund's returns drop 20 percent below the previous six months' so-called high-water mark, or previous greatest value.

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While it is impossible to say how many people may want to redeem their investments, the person familiar with the matter estimated that the fund's value will likely drop below $150 million after investors finish pulling out.

Meriwether, who is best remembered in the hedge fund industry for having run collapsed hedge fund Long-Term Capital Management, started JWM Partners in 1999 and now manages roughly $1.6 billion in assets.

His other fund, the roughly $1 billion Relative Value Opportunity Fund, is also suffering heavy losses and is now down some 24 percent from January, the person said.

Recently, losses prompted the firm to trim about 16 people from its payroll, reducing the firm's size by about 22 percent, the person said. The cuts came in all departments ranging from support staff to portfolio management and were announced internally late last week.

Also two London-based principals have announced plans to retire, the person said.

(Reporting by Svea Herbst-Bayliss, editing by Maureen Bavdek)

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