Intrawest’s parent company Fortress Investment Group LLC told
investors Wednesday that they won’t get their money back for some time, as the
company suspended redemptions in one of its funds.
Fortress, a private equity and hedge fund firm, said it had
temporarily suspended redemptions at its Drawbridge Global Macro fund after
receiving requests to withdraw more than $3.5 billion.
Shares of Fortress plunged 30 per cent Wednesday, to as low as
$1.71, following the announcement.
As of Sept. 30, the Drawbridge
Global Macro funds had $8 billion in assets under management, Fortress said. In
Wednesday’s filing, Fortress estimated that, with the latest wave of
redemptions halted, the fund would have $3.65 billion in assets under management
on Jan. 1, 2009.
Fortress had been preparing for investors to withdraw their
money and in a conference call last month CEO Wesley Edens said, “we expect to
experience increased redemptions at year end.”
Several other hedge fund managers have recently blocked
redemptions to prevent a forced fire sale of their investments. Reuters
reported that: “Suspending redemptions was once a sign that a fund was about to
fail, but it is now a much more accepted tool to safeguard capital — for
a while at least.”