Following Insider Trading Scandal, FrontPoint On Verge Of Collapse After LPs Pull Half Of Their Holdings

Tyler Durden's picture

Not even a week has passed since it was disclosed that FrontPoint was one of the
main funds benefitting from a biotech insider trading scandal (for
another possible beneficiary, see here),
and the former Morgan Stanley fund is on the ropes, battling for its
survival: the reason, per Reuters, is that LPs have decided to
pull half the fund's assets, roughly $750 million. Which means that as the fund struggles to
liquidate holdings, many of which in less than liquid names which will
likely need to be internalized by investment bank prime brokers, various
biotech stocks are about to see some notable selling pressure. One wonders why Morgan Stanley was rushing to spin off the soon to be defunct asset manager...

From Reuters:

Investors
in hedge fund firm FrontPoint's healthcare portfolios have asked
managers to return about half the assets, or about $750 million, after
the fund and its top manager became embroiled in an insider trading
case, a source familiar with the matter said on Monday.

The
Greenwich, Connecticut-based hedge fund firm has also extended the
redemption deadline to Dec. 1 from Nov. 15 to receive money back on Dec.
31, FrontPoint's co-chief executive officers told their investors late
last week.

Below we present the top 25 stock holdings of FrontPoint which will likely not do all that hot in the coming week as liquidations ensue.