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Hedge fund FrontPoint hit by $3 billion in redemptions

http://finance.yahoo.com/news/Hedge-fund-FrontPoint-hit-by-rb-3572330763.
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Hedge fund FrontPoint hit by $3 billion in redemptions
On Friday November 26, 2010, 3:22 pm EST
By Svea Herbst-Bayliss

BOSTON (Reuters) – FrontPoint Partners, a $7.5 billion hedge fund currently embroiled in the U.S. government’s fast-moving insider trading probe, has been asked to return $3 billion to its investors.

“The deadline for year-end redemptions has elapsed and we have received approximately $3 billion in total redemption requests,” FrontPoint co-chief executive officers Dan Waters and Mike Kelly said in a letter sent to investors on Friday.

Reuters obtained a copy of the letter.

A spokesman for FrontPoint declined to comment.

About half of the redemption requests were related to FrontPoint’s healthcare portfolios, which executives decided to liquidate. The portfolios were allegedly at the heart of one of the government’s probes, people familiar with the matter said.

Investors in those portfolios have already received their money back, the FrontPoint executives said in their letter

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