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From Kirsten Bischoff, Opalesque New York: ...
Chief Investment Director of GAM’s multimanager business David Smith recently told the Wall Street Journal "I would not be surprised if the hedge-fund industry has net cash outflows for the next few quarters, though I expect the demand for absolute-return products will continue". (Source)
Additionally sobering are the statistics released recently by Hedge Fund Research which reported “Throughout the entire hedge fund industry, 240 new funds were started in 2Q 08, while 180 were shut down.”
Opalesque recently spoke with Ingrid Pierce, a partner in Walkers' Corporate and International Finance Department and head of the firm's Commercial Trusts Group about the newest way firms are using side pockets in face of higher levels of investor redemptions. “As a general matter, side pockets have been in use for some time,” Pierce noted. “If the fund documents allow you to acquire certain illiquid securities and place them into a separate side pocket, the investors that have shares in that side pocketed investment are effectively locked up until such time as that investment can be realized. However, when that investment can be realized is a very tricky thing. Especially in this market”
Typically, funds which deal in illiquid securit...................... To view our full article Click here
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