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LONDON, July 1 (Reuters) - Horizon Capital Management has suspended a hedge fund running almost a third of its capital in Greek assets because it cannot fully assess the value of holdings amid the country’s deepening debt woes, a letter to investors obtained by Reuters showed.
The Horizon Growth Fund had 31 percent of its assets invested in Greece just before the country announced capital controls and a week-long closure of banks and the Athens Stock Exchange last week, according to the letter. The fund managed $159 million at the end of May.
The suspension of the Horizon fund is one of the first signs of serious hedge fund disruption since Greece defaulted on debt owed to the International Monetary Fund on Tuesday.
It could trigger similar actions by other funds with exposure to Greek stocks and bonds, as investors query how managers should value their assets and provide a true and fair price for investors who want to buy or sell units.
“In order to protect the interests and ensure the equal treatment of our investors, the calculation of the NAV (net asset value) and the subscription and redemption process have been temporarily suspended,” the letter sent on Tuesday by Virginia Martínez, the firm’s investor relations officer, showed.
An email and call to Martínez remained unanswered.
While the latest value of the fund is unclear, Horizon estimated that the fund may have lost 5.43 percent during the month of June. The fund had gained an estimated 2.8 percent through the end of May, another newsletter showed.
The Uruguay-based firm, which has increased the value of its investments by nearly 23 percent annualised since its launch in 1999, assured investors that valuation of the fund, subscription and redemption process will resume after the exchange opened.
Heading into June, Horizon had expected a speedy resolution to the Greek debt crisis and raised its exposure to the country.
“Times of turbulence and extreme pessimism are generally buying opportunities, like Greece currently,” the fund had told investors in its update for May which showed a 28 percent exposure to the country then.
The fund invested 8 percent of its assets in Greece’s Public Power Corporation, its top bet at the end of December. Infrastructure company Ellaktor also found a place in its top-5 holdings at 4 percent of the assets. (Reporting by Nishant Kumar; editing by Sinead Cruise and Louise Heavens)