NEW YORK (HedgeWorld.com)–Clinton Group Inc. officials and investor clients are in discussions about how to proceed with the management of its Trinity Fund, a troubled mortgage-backed securities fund.
Available options range from broadening the investment direction of the fund to more of a multi-strategy approach to closing the fund completely, according to an industry source.
Trinity fund’s performance has been relatively poor in recent months amid turmoil about Clinton’s pricing practices. MAR/Hedge reports that the fund is said to be down again in January after posting a loss of 21% for 2003.
Broadening its approach to something closer to Clinton’s multi-strategy funds holds appeal because those funds are performing relatively better, especially in January. Clinton Multi-Strategy Fund returned 2.25% in January, while Clinton Riverside Convertible Fund returned 1.45% and Global Fixed Income–which is more of a multi-strategy fund–returned 2.75% in the same period. The CSFB/Tremont* Hedge Fund Index returned 1.7% in January, and the CSFB/Tremont Convertible Arbitrage Index returned 1.42%.
Clinton has been hit with redemptions, poor performance and an accusation last year from a former employee, Anthony Barkan, that it was not properly pricing some of its asset-backed and mortgage-backed securities. Clinton had US$1.8 billion in redemptions in December alone, though officials are anticipating that assets and performance will stabilize .
*Tremont Capital Management Inc., Rye, N.Y., is a strategic partner of and a minority investor in HedgeWorld.