Nov 20 2014 | 1:50pm ET

Claren Road Asset Management has been buffeted by redemption requests following its dismal October.

The hedge fund is set to post its first-ever losing year this year, after dropping nearly 10% last month. But its strong track record hasn’t assuaged investors, who have moved to pull about a quarter of its $7.3 billion in assets.

Clients have filed redemption requests totaling $1.9 billion, Bloomberg News reports. Of the total, $1.2 billion will leave Claren Road’s flagship fund and $700 million its credit opportunities fund.

The firm has enough cash on hand to meet that level of withdrawals, according to Bloomberg.

Claren Road was badly burned by its big stakes in Fannie Mae and Freddie Mac in October. The mortgage giants’ shares fell by about half in the wake of an adverse court ruling for several other hedge funds challenging the government’s 2008 bailout of the companies.

New York-based Claren Road said that, in spite of the huge losses, it is sticking with its bet, calling it “a multifaceted investment” with a “compelling risk-reward profile.”

“We believe strongly in our investment approach, which has produced gains every year since our founding in 2005, and look forward to helping our clients achieve their investment goals,” Claren Road said.
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