A large hedge fund or investment bank trading portfolio is liquidating and causing chaos in some areas of the hedge fund business, according to MarketWatch. 

Black Mesa Capital, a quantitative hedge fund that uses computer models to track down investment ideas, told investors that at least one large hedge fund or investment bank is liquidating “massive” trading portfolios, according to a letter the firm sent to investors on Wednesday. It is causing disruptions and triggering big losses among other so-called market-neutral hedge funds, Black Mesa stated in the letter, a copy that was obtained by MarketWatch yesterday.

“Clearly, something is amiss in the markets that few in our strategy, if anyone, have experienced before,” Black Mesa’s managers Dave DeMers and Jonathan Spring wrote.

The firm’s hedge fund has about $1.9 billion in long positions and $1.9 billion in short positions, and is down around 7.5% this month through Aug. 7. It could be down as much as 10% since then, Black Mesa noted.

Recently, Goldman Sachs hedge fund, North American Equity Opportunities fund, sold off some of its positions. Goldman’s largest hedge fund, Global Alpha Fund, suffered loses recently and may also be selling some positions, as well.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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