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Hedge fund's losses soar in recent weeks

August 28, 2007|From Times Wire Services

Hedge fund group Tudor Investment Corp.'s Raptor Global Fund has lost 8% this year after turbulent market conditions in August hurt some of the portfolio's bets, two people familiar with the fund said Monday.

Losses at the $8.5-billion fund, run by James Pallotta, widened in the first weeks of August, they said.

At the end of last week, the Raptor fund was down 5.5% in August, a person familiar with the numbers said.

In July, the fund had lost 9.7%, which put it down 3.6% for the year. Within a few weeks it had lost $400 million after some investments were "simply crushed," the fund told investors, the sources said.

A spokesman for the fund declined to comment.

Investors and analysts are bracing for the year's first monthly loss for the U.S. hedge fund industry as a whole.

"This month looks pretty grim," said Christopher Holt, managing director of Holt Capital Advisors, which helps investors put money into hedge funds.

Although hedge funds were once limited to wealthy individuals, pension funds and other institutional investors have become active investors as they seek to boost their returns.

Pallotta, who runs Tudor's stock portfolio from Boston, has delivered average annual returns of 19.2% to the fund's investors since 1993, a person familiar with the fund said. That would rank him among the $1.75-trillion hedge fund industry's most successful traders.

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