MIAMI VISE GRIP | By RODDY BOYD | Business News | Financial | Business and Money: "July 4, 2007 -- A series of disastrous bets on a key subprime asset-backed index and subprime mortgage bonds has put a high-profile Miami hedge fund in dire straits.
United Capital Asset Management's Horizon ABS fund family yesterday said that so many investors have tried to withdraw their capital over the past 10 days that it has been forced to suspend heeding those requests. The fund - up 39.52 percent last year - is down 5 percent over the past two months.
UCAM, based in Key Biscayne, Fla., manages about $620 million; about $266 million in client capital has been temporarily frozen.
Horizon suffered mightily when fund founder and portfolio manager John Devaney purchased 'hundreds of millions of dollars' worth of a highly watched asset-backed subprime bond index called the ABX, betting that the index would rise in value, according to traders familiar with the matter.
After the initial buying pushed the index a few points higher, the index has essentially collapsed in price. The trades appeared to have been executed at prices in the high $60s; the index is now trading in the low $50s.
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