Once, Twice, Three Times…..Basis Returns Cash for Fourth Time as It Slams Hedge Fund Shut

Once, twice even three times is not enough. Basis Capital Fund Management Ltd., the Australian asset manager that became one of the first casualties of the global financial crisis, is returning cash to investors for the fourth time as it shuts the Pac-Rim Opportunity Fund.

Investors, who voted to close the hedge fund last year, will receive $34 million, following repayments in July and October 2008 and April this year, according to a letter posted on the company’s Web site today. That represents 90 percent of the remaining value of the fund, which was previously Basis Capital’s largest with $570 million in March 2007.

Basis Capital’s Yield Alpha Fund, formerly the second biggest, filed for bankruptcy protection in the Cayman Islands in August 2007 after banks cut the value of its investments in collateralized debt obligations, triggering margin calls the fund was unable to meet. That came a month after investors in two Bear Stearns Cos. hedge funds were told there was no value left, wiping out the $1.6 billion initially invested.

“We are moving as quickly and practically as possible with legal and audit advisors to wind down the fund to enable orderly liquidation,” Basis Capital said in the letter to investors.

Basis is “unlikely to be in a position” to lift its existing suspension on redemptions, and will sell the remaining structured credit portfolio, the company said today.

http://www.bloomberg.com/apps/news?pid=20601081&sid=ad.6Cvk1d0m8