Tremont to close hedge fund unit

Tremont Group Holdings Inc. of New York is closing its hedge fund division following $3.1 billion in losses associated with the Bernie Madoff scandal, according to the firm.

Rye (N.Y.) Investment Management, Tremont’s hedge fund unit, had invested all of its assets in a fund tied to Bernard Madoff Investment Services.

Tremont will retain staff from the Rye division to seek recovery of available assets from a $50 billion Ponzi scheme allegedly perpetrated by Mr. Madoff and his New York-based investment firm.

State Street launches fixed-income ETFs

State Street Global Advisors of Boston today announced the launch of two new fixed-income exchange traded funds: the SPDR Barclays Capital Short Term International Treasury Bond ETF (BWZ) and the SPDR Barclays Capital Mortgage Backed Bond ETF (MBG).

“Recent market volatility has increased demand for fixed-income ETFs that provide efficient and cost-effective exposure to markets that help investors enhance the diversification of their fixed-income holdings,” James Ross, a senior managing director at SSgA, said in a statement.

Lehman offloads two private-equity funds

A Luxembourg investment partnership has agreed to purchase two private-equity funds from the Lehman Brothers Holding Co. bankruptcy estate.

Reinet Fund S.C.A., a wholly owned subsidiary of Reinet Investments S.C.A. in the Grand Duchy of Luxembourg, will buy the funds from Lehman Brothers Merchant Banking and commit to $230 million to the funds over a three-and-a-half-year period, the firm said.

No further details were provided on the value of the transaction.