Hedge fund manager Ospraie Management LLC will close its flagship fund after it plunged 27% in August on losses in energy, mining and natural resources equity holdings, in one of the biggest ever closures of a commodities-focused hedge fund.

The closure of the fund, announced by the firm's founder Dwight Anderson in a letter to investors on Tuesday, could be more bad news for Lehman Brothers Holdings Inc., which took a 20% stake in the hedge fund manager in 2005.

One expert said the closure of the fund, which at the time of the letter's writing had lost 38.59% this year, may also have played a role in bringing down U.S. stocks on Tuesday, which fell after initially climbing more than 1%. Lehman shares were down more than 3% in after-hours trading.

Continued at Financial Post