By Lawrence Delevingne
BOSTON (Reuters) – Prophet Capital Asset Management LP, an investor in loans and structured credit securities, plans to temporarily block investors from removing their money from one of its hedge funds and ultimately dissolve it, according to a letter sent to investors on Monday reviewed by Reuters.
“As you are no doubt aware, financial markets are experiencing extreme volatility and impaired liquidity as a result of the Coronavirus crisis,” Prophet executive David Rosenblum wrote.
Because of the crisis, the firm had decided “in turn” to block all investor redemptions for Prophet Opportunity Partners LP and wind down the fund over time, he added.
The fund had a net asset value of $539 million as of Feb. 28, with $125 million in cash on hand and total debt of $117 million, according to the letter.
The fund was down 2.6% for 2020 through February, the letter showed. No March performance was given.
Rosenblum did not immediately respond to an email seeking comment. Prophet, based in Austin, Texas, manages approximately $2.4 billion overall, according to the letter.
(Reporting by Lawrence Delevingne; Editing by Tom Brown)
