Braddock to shutter $300M hedge fund

Braddock Financial Corp. said it will liquidate its $300 million hedge fund, the Galena Street Fund, after concerns of subprime mortgage exposure triggered investor redemptions. Denver-based Braddock said that nearly 60% of its investors sought redemptions as of June 30, according to New York Post report. Redemptions from investors nervous about subprime mortgage crisis increased after the fund posted a 3.02% loss in the first quarter. The fund had gained 7% in 2006 and was up 69.7% over the previous four-year period. Investors in the fund will receive 20% of their balances by early next week, the company said in a statement on its website. "We made this decision, which we believe to be in the best interest of our investors, as a result of redemption requests that were triggered by news that has impacted the asset-backed securities markets negatively," the statement read. Concerns about losses in subprime mortgage investments were increased last month when Bear Stearns bailed out its High Grade Structured Credit Fund hedge fund run to the tune of $3.2 billion after the fund was burned by subprime bets (InvestmentNews, July 22) .