(Bloomberg) ? Amaranth Advisors LLC suspended redemptions in order to sell off its remaining assets after losses at its two main hedge funds continued in the past week.

The funds are down as much as 70 percent for the month, the firm said in a letter to investors. Redemption requests scheduled for Saturday and October 31 won?t be honoured, preventing investors from withdrawing any money for at least another month.

?Our current intention is to dispose of the remaining positions in the funds? portfolios in an orderly fashion over time, seeking to maximise sale proceeds and to make periodic cash distributions to investors on a pro rata basis,? founder Nicholas Maounis, 43, said in the letter.

Amaranth is the Greenwich, Connecticut-based hedge fund manager that imploded almost two weeks ago after making wrong-way bets on the direction of natural-gas prices. The firm, which managed $9.5 billion of assets as recently as August, now has lost about $6.5 billion in the biggest hedge fund meltdown.

Shawn Pattison, a spokesman for Amaranth, declined to elaborate on the letter.

Amaranth initially pegged its September losses at about 50 percent. The decline accelerated to 65 percent as of September 19, or about $6 billion, after Maounis sold off the firm?s energy trades.

Maounis said his search for an investor has been unsuccessful and the firm is continuing talks. New York-based Citigroup Inc., the biggest US bank, and Amaranth broke off discussions after more than a week.

The notice of additional losses at Amaranth capped one of the rockiest months for the hedge fund industry.

More than two weeks ago, regulators in the U.S. and Malaysia began investigating Mount Kisco, New York-based Aeneas Capital Management LP after bad bets on Malaysian stocks caused losses of about 60 percent in one of its funds. Two days ago, Pirate Capital LLC, which oversees $1.7 billion, said half of its 10- member investment team quit.

Norwalk, Connecticut-based Pirate didn?t give a reason for the departures, though former employees said they disagreed with founder Thomas Hudson over compensation.

Hedge funds are largely unregistered pools of capital that let managers participate substantially in gains on the money invested. There are more than 8,000 hedge funds with $1.2 trillion in assets, more than double the figure five years ago, according to Hedge Fund Research Inc. in Chicago.

Amaranth intends to reduce operating expenses ?to the extent that we are reasonably able to do so while also seeking to retain the key staff required to manage the process going forward,? Maounis said in his letter.

The firm said it honoured redemption requests for August 31.

Some clients pushed Amaranth to release whatever money was left during discussions this past week, even if Maounis were successful in selling a stake to Citigroup or another party.

Other investors feared a fire sale of assets would leave even less money behind. By suspending redemptions, the firm is siding with those who want to get the most out of Amaranth?s remaining investments.

?Our concern regarding potential liquidation would be that it be conducted in an orderly manner, recognizing the market impact it would have and maximizing the remaining value of the portfolio,? said Brian White, chief executive officer of the $7.2 billion San Diego retirement fund.

White estimates his fund has lost about half of the $175 million it invested with Amaranth.