Hedge Fund Archeus Says It Will Close

Another highflying hedge fund has fallen to earth. A month after Amaranth Advisors was undone by disastrous energy trades, Archeus Capital is blaming its downfall on a more mundane problem: sloppy bookkeeping. Just a year ago, Archeus, founded and run by two former bond traders from Salomon Brothers, had assets of $3 billion. On Monday, claiming about $700 million in assets, Archeus told its investors it would close, The New York Times reported on Tuesday.
In its letter to investors, Gary K. Kilberg and Peter G. Hirsch, the fund’s founders, blamed the failure of its administrator to maintain accurate records for its closure. “This failure, and their subsequent inability to properly re-reconcile the fund’s records, led to a series of investor withdrawals from which we have not been able to recover,” the two men wrote in the letter.
Archeus’s financial performance probably did little to inspire investors’ confidence either. Through the first week of October, its main fund was down 1.9 percent for the year.