Sandell reorganizes Castlerigg funds, threatening a lockup but offering to cut fees

Mon Nov 17, 2008

Tom Sandell's Sandell Asset Management is the latest firm to impose a lockup on investors - without calling it that, of course. Investors in the firm's Castlerigg Master Investments and its flagship Castlerigg International, which was down 24.23% through October, were informed last Friday that if they do not adopt a reorganization plan proposed by the firm, Sandell will suspend all redemptions and indefinitely lock up their money anyway. Those who agree to stay, however, will get a break on fees, as will any new investors.
In a November 14 letter to investors, the firm said that prolonged market difficulties and the resulting liquidity drain have led to a large number of redemption requests for December 31.

"Fear that certain other funds will invoke constraints has led to the unfortunate self-fulfilling prophecy of redemptions being substantially larger than they might ordinarily have been as investors have sought to...


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