Dec. 17 (Bloomberg) -- BP Capital LLC, the money manager founded by billionaire T. Boone Pickens, said the redemption rate at its equity fund was 65 percent as the company waived the normal requirements for investors to withdraw cash.

The 90-day notice period and the quarterly withdrawal limitation were lifted for holders who informed the company of their plans by Oct. 31, Jay Rosser, a spokesman for the Dallas- based company, said today.

“The move to allow investors to redeem was a voluntary one because we recognized the economic hardship our investors were experiencing in this market,” Rosser said in an e-mailed reply to Bloomberg questions. There was no withdrawal from the company’s energy fund, he said.

Pickens said Sept. 30 on CNBC that 15 percent of his hedge funds’ investors asked for the option to withdraw their money. His company lost $2 billion this year since July as oil and natural gas prices slid, according to an Oct. 26 edition of CBS Corp.’s “60 Minutes.” The deficit is little changed since then as the company converted its holdings into cash, Rosser said in the e-mail.

“That number won’t go up or down significantly until we decide to get back in the market,” he said.

Citadel Investment Group LLC, Fortress Investment Group LLC and Tudor Investment Corp. limited redemptions this year after making losses. As of October, 18 percent of the hedge-fund industry assets, or about $300 billion, were subject to withdrawal restrictions, according to Peter Douglas, principal of Singapore-based consulting firm GFIA Pte.

‘Sick Year’

The global recession that started in the U.S. caused stocks worldwide and commodity prices to plummet as demand for oil and copper shrank. The S&P GSCI Index of 24 raw materials has slumped 46 percent this year, led by declines in industrial metals, crude oil and wheat.

Pickens, 80, manages funds linked to energy commodities and equities. He won’t buy energy stocks until the economy turns around, he said Dec. 9.

Next year “is going to be a pretty sick year for energy, but the first of the year 2010 you could work yourself back up,” Pickens said at the time. “It’s too late to short anything.”

Among his investments in September were Devon Energy Corp., Chevron Corp. and Occidental Petroleum Corp.

The American Stock Exchange Oil Index, which measures the performance of 13 oil production and refining companies, has dropped 35 percent since the end of June. Oil prices on the New York Mercantile Exchange have declined 67 percent in the same period.

Oil for January delivery traded at $41.40 a barrel as of 1:05 p.m. in New York.

To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net or;

Last Updated: December 17, 2008 13:11 EST