SRM fund sees sharp fall

SRM Global, the hedge fund that is the largest shareholder in stricken UK bank Northern Rock, has fallen almost 50% since it raised $3bn in Europe’s biggest hedge fund launch in 2006, according to investors, as a series of big bets turned sour. The drop, mostly in the past three months, is a serious blow to the reputation of Jon Wood, the former UBS star trader and shareholder activist who runs SRM. However, long lock-ups prevent investors withdrawing their money for a minimum of three years, giving Wood time to turn performance around without fear of redemptions until the autumn of next year at the earliest. Much of the money – reported to have included $500m UBS put in at launch – is locked up for five years. Wood’s fund fell sharply in the final two months of last year to end down about 28% for the year, say investors. It dropped further in January, with one investor putting the drop for the month at about 23 per cent. Bloomberg on Wednesday reported that SRM had lost 30% up to Jan 18.