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| Posted: Tue Oct 21, 2008 6:07 pm Post subject: Massive hedge fund redemptions feared | |
 The $2 trillion hedge fund industry could be forced to unwind and liquidate major positions in an effort to meet what is expected to be above-average levels of investor redemption requests.
The implications of a redemption wave could place the hedge fund industry in the position of indirectly applying a major drag on the financial markets. “Redemptions will always depend on the hedge fund manager or general partner,” said John Van, Nashville-based chief compliance officer for Greenwich (Conn.) Alternative Investments LLC. In the context of current market mayhem, much emphasis is being placed on the significance of Sept. 30, which was a window for redemptions. However, as Mr. Van explained, hedge fund offering memorandums typically provide the general partners with a lot of discretion with regard to redemption requests. While some hedge funds do offer monthly liquidity, others might impose lock-ups of a year or more. And most redemption requests have to be placed a few months in advance. http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20081001/REG/810019992/-1/rss02&rssfeed=rss02
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