No New Investors for Arbitrage Fund

The Arbitrage Fund, which plays by the mergers and acquisitions risk arbitrage strategy, will close its doors to new investors beginning Jan. 30. And as of Feb. 27, its sister fund will also close.

Walter Island Capital of New York, which advises the funds, said that those people who have already invested in the funds will be allowed to stay on, but that the decision to close now will help keep returns up. Currently, the fund manages $270 million in assets.

"While we remain optimistic regarding the outlook for merger activity in 2004, our desire to avoid the 'asset bloat' and lack of focus that has negatively impacted results at other investment pools that follow similar strategies, is the primary driver behind our decision," said John S. Orrico, president of Walter Island Capital.

The fund employs such aggressive hedge fund-like strategies as short selling and heavy leveraging.

The Arbitrage fund is the only fund that Walter Island currently manages.

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