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Benedicte Gravrand, Opalesque London:
Some funds, especially multi-strategy funds and FoHFs, have kept a portfolio of mixed liquidity terms. When the redemption wave came crashing down on them last year, some could not honour their investors' demands and used gates, in effect blocking the money in. Some investors, including institutional investors, were not so surprised by this - as it is known that gates can be used in such situations. Investors who did not think that gates would ever be used were the ones who were - very - surprised to see their money locked-up.
Some of the steps that can be taken to avoid generating more of these irksome situations are; creating products with liquidity and fee terms better aligned to investors' needs; creating high-liquidity UCITS products; and making sure fund valuations are aligned with true liquidity, and done by a separate committee.
Polygon is creating products that make sense
When you can't meet investors' redemption requests, "you're in a bad spot," said Reade Griffith, founding partner and CIO of the London offices of the $5bn fund house Polygon, at the Hedge 2009 conference in London last week. Investors must be signed to products according to their liquidity requirements.
That is why Polygon Investment Partners (UK) is currently working on the creation of new products that are tailor-made to mat...................... To view our full article Click here
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