The $2 billion Marin Capital, a convertible bond hedge fund management firm based in San Rafael, Calif., is no more.
According to a report in yesterday's Wall Street Journal, the firm told its investors that it lacked suitable investment opportunities and had very little chance of uncovering any in the future, and so, it has decided to return their money.
Marin has been struggling with poor returns for some time, although it fares no worse than its peers. In fact, experts speculate that challenges that faced Marin are endemic. In short, as more hedge funds flood the market, fewer opportunities for growth exist. Therefore, some managers have decided to charge higher fees or lock up their investors' money for longer periods.
Some market observers say additional closings are just what the market needs. As redemptions and forced selling positions have mounted, many convertible bonds are finally trading at attractive levels.