More Than 100 Hedge Funds Stranded in Cayman Islands

More than 100 hedge funds stranded in Cayman Islands
More than 100 hedge funds have a collected $6 billion sanctioned in the Cayman Islands

(Bloomberg) Sanctions against Russian Billionaire have left more than 100 hedge funds and private equity firms’ money stranded in the Cayman Islands.

Concord Management has $6 billion at its disposal, most of which pertains to Oligarch Abramovich.

The firm is said to have handed out checks of millions of dollars to more than 100 hedge funds.

Now these hedge funds have a collected amount of $6 billion stranded in the Cayman Islands.

I’ll get to the names of some of the biggest hedge funds below.

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Firms trapped with Russian cash

Bloomberg’s Anna Edwards says sanctions prohibit hedge funds from getting rid of tainted money.

The restrictions also put a hold on the collection of fees.

The Russian-Ukraine war has made it impossible for Russian oligarchs to accept new cash or redeem their stakes.

More than 100 hedge funds are caught up in sanctions trapped with Russian cash according to Bloomberg sources.

Firms with Abramovich’s money can continue to manage it, but what they can’t do is redeem the oligarch’s stake, accept new cash from him or allow him to sell his shares to another investor, according to Cayman Island rules, where many of the funds have offshore entities.

If a firm owns the billionaire money due to the sale of an asset, the proceeds must go into a blocked account.

Firms can also charge fees but cannot collect them until restrictions are lifted.

Millennium Management and other big hedge funds have been affected

Citadel Cayman Islands
Citadel Cayman Islands

Michael Matlin, who founded Concord in 1999, mostly steered money to the biggest and best-known funds.

Over more than two decades, Brevan Howard Asset Management, Millennium Management, Carlyle Group Inc., D.E. Shaw & Co., Sculptor Capital Management Inc. and Apollo Global Management Inc. — as well as smaller firms including Sarissa Capital Management and Ratan Capital Management.

Some of you might recognize Millennium Management from the list of top 10 financial institutions shorting AMC stock.

Sculptor is one of the hedge funds along with Citadel who are facing potential default on Russian bonds.

This SEC report also shows Citadel has funds in the Cayman Islands while this SG 13 form shows the relationship to Concord.

Representatives from the firms declined to comment on the matter.

Russian sanctions cripple Abramovich

Abramovich Chelsea

Abramovich, 55, with a net worth of $13.7 billion according to the Bloomberg Billionaires Index, amassed his fortune from the sale of privatized assets acquired from the former Soviet Union, including oil giant Sibneft and Aeroflot.

He sold his aluminum assets to fellow oligarch Oleg Deripaska, but retains stakes in companies including Russian steelmaker Evraz.

He’s been reinvesting the proceeds in trophy assets for two decades, including purchasing Chelsea Football Club, London properties and private jets.

He’s being forced to sell Chelsea and has moved his superyachts to Turkey out of the reach of European sanctions.

CNN says Citadel’s Ken Griffin is joining the Ricketts family, the owners of Major League Baseball’s Chicago Cubs, in a formal bid for Chelsea Football Club.

Interesting.

I’d love to hear your thoughts in the comment section below.

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1 Comment

  1. Frank Nez

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