Investors in the fund have been told that withdrawals from the Absolute Capital Yield Strategies Fund and the Absolute Capital Strategies Fund NZD, which reportedly manage assets of $177 between them, have been suspended.
The two funds are estimated to have less than five per cent exposure of their investment assets to the US sub-prime mortgage market.
A statement from Absolute Capital Group managing director Deon Joubert said: "Absolute Capital believes a temporary closure of the funds is the best defensive measure to protect the longer term interests of our investors given the current illiquid nature of the funds' investments."
News that the two funds are in difficulties follows the recent decision from Basis Capital to also suspend withdrawals from Basis Yield Alpha Fund (Master) last week.
Basis Capital has also hired Blackstone Group to advise on minimising its losses from asset sales.