Big Loss Prompts Funds’ Liquidation

Beacon Hill Asset Management, a $1.7-billion hedge-fund group specializing in mortgage-backed and asset-backed securities, said it is liquidating two funds after losing $400 million since the end of August, according to some investors in the funds.

The money management firm said the asset value of its funds fell 54% in September. Last week Beacon Hill, which had $740 million in the funds at the end of August, told investors it estimated the losses at 25% because of accelerated mortgage prepayments.

Calls to Beacon Hill were answered by a recording saying the company has received an unprecedented number of calls and will return them as soon as possible.