Case Study: Weavering Macro Fixed Income Fund Ltd
Weavering Macro Fixed Income Fund Ltd: the “low-risk” hedge fund
Waevering Marco Fixed Income Ltd, Cayman Islands hedge fund registered in April 2003, listed in Dublin and trading on Irish Stock Exchange, was a company using the “low-risk” strategy when investing and exchange-trading on the futures market and option exchange market. This low-danger investing convinced many investors to put their money in the fund.
Even though the company's management structures were traditional, there was one exemption. According to agreement made on July 31st 2003, the Waevering Capital (UK) Ltd (WCUK), a company incorporated in England, was placed in the role of the Investment manager of Waevering Macro Ltd. The WCUK's primary function was to be an investment advisor to another funds, whose current situation on the trade market was not ideal. This company was created and owned by Magnus Michael Peterson, Swedish businessman.
The Waevering Macro Ltd was in the first place
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At the beginning of worldwide financial crisis, in 2009, the investors started asking for their money back in order to avoid any losses as early as possible. However, the company was not able to pay back the investors and subsequently terminated its trading on all the markets. In March 2009, the Waevering Macro Fixed Income Ltd was put into liquidation and losses to the investors were estimated to be around $536 million.
In 2011, two years after the investigation of this case started, The Serious Fraud Office (SFO) of the United Kingdom found out that the fund collapsed because its assets value had been bloated up by interest rate swap deals made with company's linked advisor WCUK, owned and controlled by Mr. Peterson. This interest rate swap transactions, created and executed by Peterson, inflated artificially Waevering Macro's financial achievements, and therefore misguided investors about its assets' real
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