Year end redemptions in hedge funds

Many hedge fund investors can withdraw money on Dec. 31. Some funds require that redemption requests be submitted 90 days ahead of time. That means requests have to be in by Tuesday. Other funds require 45 days notice, so there may be another round of withdrawal requests toward the middle of November.

"The major impact is coming," said Sol Waksman, president of BarclayHedge, which tracks assets and performance in the industry.

"If managers anticipate the amount of redemptions correctly, it won't be a problem," he added. "But a lot depends on performance in the last quarter."

The industry is on course for its worst year of performance in at least a decade. If hedge fund returns recover, investors may become more patient and cancel some of their redemption requests before Dec. 31. But if losses continue, redemptions may be higher than expected.
Source:Marketwatch

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