May 5, 2005

Aman Capital Management Faces Big Losses

From the FT ($$):
One of Singapore's biggest hedge funds is thought to be facing significant derivatives trading losses, following the resignation of one of its main fund managers.

Aman Capital Management on Wednesday confirmed that its $242m hedge fund had suffered "trading losses in April", which have raised concerns about its internal risk controls.

The company also confirmed the departure of Michael Syn, a former derivatives specialist at UBS, the Swiss banking group.

A company official declined to comment on the likely cause and extent of the trading losses, pointing to an "independent review" launched by the fund's administrator, or back-office services provider, at the end of last week.

However, industry experts believe the fund may have lost more than $43m, or 18 per cent of its assets, in April by investing in derivatives based on the Korea Composite Stock Price Index.

Oye, I viewed the mild volatility increase in April as a needed shot in the arm to active managers but apparently not.

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