The Geneva, Ill.-based firm is going through some difficult times now, as it attempts to shift from hedge funds to more private equity. To begin with, The Wall Street Journal reports, Ritchie is just not as rich as it was a year ago as investors have pulled a full one-third of its once $3 billion assets under management, while its largest hedge fund has sputtered, dropping from +11% in April to a bit underground recently. Making matters more dire has been the firmÕs use of Òside pocketsÓ, says The WSJ. One such side pocket, which invested in hurricane insurance, tumbled 37% in May (though the firm officially says it still hopes to profit from the investment and other side pockets at Ritchie reportedly are profitable). Still, the damage seems to be done, and partner Paul Wolfe told the paper, ÒAll the noise about the [side pockets] have made it difficult to raise capital.Ó Ritchie, says The WSJ, citing investors, is trying to stop the asset bleeding by offering to the investors in its biggest hedge fund to delay withdrawing their investments for three years or turn their investment into debt repayable in two years. If that doesnÕt work, according to The WSJ, the firm may have to sell off some of its profitable investments and even let go of some personnel. Ritchie is said to be working in earnest to clear the air about the side-pocket accounts by disclosing more information about them. Amid all this upheaval, the firm is also looking to hire a new team of executives who have the skill to lead Ritchie into private equityÕs promised land.