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1 Mar 2007

Ritchie to Sell Flagship Hedge Fund

Ritchie Capital Management Ltd has been struggling for two years now with below-average returns and the word is out that the company plans to sell its flagship hedge fund to equal partners in the venture, Reservoir Capital Group and Coller Capital.

Ritchie Capital, which oversees about $2.8 billion including borrowed money, will liquidate its Multistrategy Global Fund and return cash to investors. The company told investors that the Ritchie Capital Management flagship multi-strategy hedge fund had about $730 million in assets in mid-2006.

Richie is negotiating to sell the flagship hedge fund's assets to Reservoir, the $3 billion hedge fund investor, and Coller, which manages about $3.5 billion, in a deal that could be worth more than $1 billion. According to the deal with Coller, the current chief executive, Thane Ritchie, may continue to manage the fund after the sale.

Chicago-based Ritchie, a diversified hedge fund group that faced an extended period of under performance and investor demands for capital returns, has been in exclusive talks with Reservoir and Coller for several months to buy the flagship fund, sources have said.

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