Hedge fund-of-funds manager PlusFunds Group filed for Chapter 11 bankruptcy protection Monday in U.S. Bankruptcy Court in New York. As part of the filing, the firm wants court approval for PlusFunds Group's acquisition by FTVentures, a private equity manager, for $5 million. PlusFunds has been unable to recover $312 million of client assets from its SPinX Managed Futures Fund held by broker-dealer Refco and its subsidiaries in futures and prime brokerage accounts, said David Peress, PlusFunds' chief restructuring officer, in an affidavit submitted to the court. Refco filed for Chapter 11 bankruptcy protection Oct. 17. In December, PlusFunds Group informed investors in the fund that their money could not be recovered and investors in PlusFunds' other funds began to redeem their assets. Assets dropped to $1 billion as of March 6 from $2.5 billion at the end of September and revenue dropped as a result by about 50%, according to Mr. Press' affidavit. In court filings, PlusFunds Group said it has about 70 investors, including pension funds and other institutional investors.
PlusFunds Group asked the bankruptcy court to approve its sale to FTVentures by late April. Other qualified companies may bid for PlusFunds Group through a court-supervised process. FTVentures manages $623 million and provides capital to growth companies, including 38 financial services companies, Financial Engines.