Swiss franc move sees closure of hedge fund

Marko Dimitrijevic, the hedge fund manager who survived at least five emerging market debt crises, is closing his largest hedge fund after losing virtually all its money last week when the Swiss National Bank unexpectedly let the franc trade freely against the euro, according to a person familiar with the firm.

Everest Capital’s Global Fund had about $830m (€717.5m) in assets as of the end of December, according to a client report. The Miami-based firm, which specialises in emerging markets, still manages seven funds with about $2.2bn in assets. The global fund, the firm’s oldest, was betting the Swiss franc would decline, said the person, who asked not to be named.

Armel Leslie, a spokesman for Everest Capital with Peppercomm, declined to comment on the losses. Calls to Dimitrijevic weren’t returned.

The SNB’s decision to end its three-year policy of capping the franc at 1.20 a euro triggered losses at Citigroup, Deutsche Bank AG and Barclays Plc as well as hedge funds and mutual funds. The franc surged as much as 41% versus the euro on January 15, the biggest gain on record, and climbed more than 15% against all of the more than 150 currencies tracked by Bloomberg.

Everest grew to $2.7bn by the start of 1998 after navigating crises in Mexico and Southeast Asia. Russia’s default and currency devaluation proved trickier and assets fell by half amid losses. He revived the firm and a decade later Everest managed $3bn.

Then the global financial crisis hit, and assets shrunk by $1bn.

* Bloomberg