July 30 (Bloomberg) -- Citadel Investment Group LLC bought most of the assets of Sowood Capital Management LP after the Boston-based firm's two hedge funds plunged more than 50 percent this month amid the rout in credit markets.

The losses were caused by ``sharply wider corporate credit spreads'' exacerbated by a ``marked decline in liquidity,'' the Boston-based firm said today in a letter to investors.

Sowood spokesman Shawn Pattison declined to comment.

Editor: Edelman

To contact the reporters on this story: Katherine Burton in New York at kburton@bloomberg.net; Jenny Strasburg in New York at jstrasburg@bloomberg.net.

Last Updated: July 30, 2007 18:28 EDT