Sowood Capital Management sold securities to meet margin calls following losses on corporate bonds, reports The New York Times. The management firm said its bonds fell in value after investors lowered its exposure to subprime mortgages and bonds used to fund leveraged buyouts. With the tightening market conditions, we thought it was prudent to increase liquidity, so we took off positions from the book, Megan Kelleher, general counsel and managing partner, said Friday. We continue to meet margin requirements.
Sowood was started by Jeff Larson, former manager of Harvard Universitys endowment. The firm has $3 billion under management.