Hedge Fund Videos | 30+ Free Videos on Hedge Funds

Hedge Funds Lockups

Hedge Funds Lockups

Investors Strongly Favor Hedge Funds with Short Lockups

Hedge funds that have short lockups seem to have curried favor with investors. A recent survey of hedge fund clients, hedge fund clients plan to allocate 90% of new investments in 2011 to hedge funds that agree not to lock up money for more than a year.
Hedge-fund customers plan to allocate 90 percent of new investments in 2011 to firms that agree not to tie up money for more than one year, according to a Goldman Sachs Group Inc. (GS) survey released today. Funds that rely on longer lockup periods so they can buy illiquid assets such as distressed debt will have a harder time attracting cash, said David Solomon, co-head of capital introductions at the New York-based bank.

“Investors have more choices of liquidity terms than they did before the financial crisis,” Solomon said in an interview. “Consequently, hedge funds with less liquid terms are pursuing a diminishing pool of capital.”

The demand for short lockups is a legacy of the 2008 financial crisis, when some hedge funds restricted withdrawals to avoid having to sell assets at a loss. Investors pulled a record $154.4 billion from hedge funds in 2008, according to data from Hedge Fund Research Inc. of Chicago.

Caxton, a New York-based hedge fund with $11 billion in assets, places no limits on how long clients must keep their initial investment with the firm.

Related to: Hedge Funds Lockups

Tags: Hedge Funds Lockups, Hedge Fund Lockup, Hedge Funds Lockup Periods, Hedge Funds Lockup, Hedge fund investors lockup, hedge fund investors lockups

Link to This Resource: Hedge Funds Lockups

Redesign by HedgeCo Website Creation