Redemptions? What redemptions?

Tue Oct 30, 2007



Long notice periods, gates make it difficult for investors to exit

By Eric Baum

With monthly hedge fund performance hitting a 10-year low in August, many expected investors to take their money and run. But outside of a few names that either suffered big capital outflows or put up gates to keep investors from bolting, little has happened. Why? Hedge fund managers and investors say that lengthy notice periods mean many hedge funds may have dodged a bullet.

Some funds that are heavily invested in structured credit or quantitative strategies are still suffering, and investor redemptions have been confined to those sectors – as is expected to continue to be the case. The most widely reported redemption was from Goldman Sachs’ Global Alpha fund, which lost $1.6...

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