Dallas-based Highland Capital shuts down two key funds

The U.S. financial crisis claimed its latest North Texas victim Thursday, as Dallas-based Highland Capital Management LP told its investors it would shut down two key funds following losses on risky loans, according to Bloomberg News.

Highland said it would close down its flagship Highland Crusader Fund as well as its Highland Credit Strategies Fund, according to Bloomberg.

The funds have assets of more than $1.5 billion, Bloomberg said. Highland had some $37 billion in assets under management as of June 30.

A spokesperson for Highland was not immediately available Thursday morning.

The credit strategies fund, which specialized in buying high-yield loans and distressed assets, experienced “unprecedented market volatility and disruption,” according to a letter Highland sent to its investors, a copy of which was obtained by Bloomberg.

Highland said it would sell 20 percent of that fund’s assets during the next six months, and another 20 percent in the following six-month period. It will sell the remaining assets in the next few years.

Crusader first ran into trouble during the summer, as it saw a significant increase in redemptions, or requests from investors who wanted to take their money out.

Highland said then it would honor the requests but would need up to nine months to give investors their money back.

Source:  Dallas News

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