One the key hedge funds at my former employer is shutting down. I have thought it was inevitable and am actually surprised it lasted this long. There are many talented people at Highland with many that are close friends of mine and unfortunately certain areas of management went down wrong roads. It is what happens when to much money chases one asset class, things are going well, and greed is running high. You increase leverage and start stretching for returns in areas that you do not have expertise in (in this case equities). In the case of Crusader, they would have survived if it wasn't for the severe market dislocation but you could say that probably about many of the failures including Lehman and AIG. It is a sad situation and I hope Highland can regain its footing with the various other funds under management and all of my friends will be okay and emerge stronger from this situation.
http://www.bloomberg.com/apps/news?pid=20601087&sid=agiw6VSt2goI&refer=home
Highland Capital Management LP will close its flagship Highland Crusader Fund and another hedge fund after losses on high-yield, high-risk loans and other types of debt, according to a person with knowledge of the decision.
Highland, whose total assets under management has shrunk to about $35 billion from $40 billion in March, will wind down the Crusader fund and the Highland Credit Strategies Fund over the next three years, said the person, who declined to be named because the decision isn't public. The hedge funds had combined assets of more than $1.5 billion.
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