Two arrested after SFO's Weavering raids

Two men have been arrested after the SFO raided two homes in Kent and Surrey as part of a probe into the collapse of hedge fund Weavering Capital.

Backed up by City of London Police, the fraud watchdogs entered two residential properties in Kent and Surrey.

The SFO confirmed two men, aged 43 and 45, were arrested and have been taken to a police station for questioning, but would not release any further information on the pair's identity.

Investment management company Weavering Capital (UK) Limited went into administration on 19 March, 2009.

Its primary function was to act as investment advisor to Weavering Macro Fixed Income Fund Limited (the Macro Fund), a Cayman Islands incorporated hedge fund.

Liquidators from PricewaterhouseCoopers were appointed over the Macro Fund on 19 March, 2009.

The Macro Fund was understood to have funds under management of around $639m in late 2008.

The investigation centres on interest rate swap deals between the Macro Fund and Weavering Capital Fund Limited, a company registered in the British Virgin Islands.

The SFO said the comapny appears to be a 'related third party' which alllegedly inflated the apparent net asset alue of the Macro Fund.