Friday, October 17, 2008

Reserve Fund Looks to Liquidate

Reserve Management Co. plans to liquidate 14 municipal money-market funds as well as its Reserve Yield Plus Fund, and has applied for some of its funds to participate in the government's guarantee program.

The New York asset manager, which shook the financial world in September with news of its money-market fund loss, said Thursday it would liquidate the assets of Yield Plus, a short-term debt fund designed to act as a complement to money funds as well as those of 14 money-market funds.

Some investors in Yield Plus had complained that they weren't able to withdraw money from the fund.

In a statement Thursday, Reserve Management said it had requested that investors in 21 of its funds be eligible to take part in the Treasury's guarantee program, which aims to support money funds whose shares fall below the hallowed $1-a-share net asset value.

The list included its flagship Primary Fund, which caused a run on money-market funds with the news last month that it had "broken the buck" -- that is, fallen below the industry's $1-a-share standard, largely because of its investments in debt of Lehman Brothers Holdings Inc., which has filed for bankruptcy protection.

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