Sentinel contagion contained to Europe

ER and Capital Futures Mgt exposed

[UPDATED Aug. 24 2004] The fallout from last week’s collapse of Sentinel Management Group Inc has reached across the Atlantic to infect at least two well-known hedge fund managers: Capital Fund Management, of Paris, France, and Helsinki, Finland-based ER Capital Management.

CFM, run by Jean-Pierre Aguilar, said yesterday that his $4 billion company could lose as much as 27 percent of the assets, or $407 million, of its Discus Master Fund, and 10 percent of the $2.2 billion assets of its Stratus Fund Ltd, which invests in a range of CFM strategies.

CFM’s exposure would almost certainly make it Sentinel’s largest single creditor. By comparison, the more than 20 US futures commission merchants paid out of Sentinel’s Seg 1 account earlier this week had total exposure of less than $400 million, based on the total $312 million that Citadel Investment Group LLC paid for most of those assets, plus Citadel’s $44.9 million vig—sorry, “market uncertainty concession.”

A total of 18 ER Capital Management entities, with mailing addresses in Helsinki, Dublin, and the Bahamas, appear on Sentinel’s creditor list, which does not state the amount owing each creditor. ER, also known as Estlander & Rönnlund, after its principals Martin Estlander and Kaj Rönnlund, was founded about 15 years ago, and currently has a little over $400 million under management.

An email seeking information as to the extent of ER’s exposure was sent to one of the principals yesterday. No response had been received by pixel-time. [UPDATE: ER’s Sentinel exposure under $1 million].

Estlander & Rönnlund

Discus May Lose $407 Million on Sentinel Collapse
by David Clarke
Bloomberg Aug. 22 2007