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Hedge funds try to hold back redemption wave
Market Watch ^ | 11/28/08 | Alistair Barr

Posted on 11/29/2008 4:24:52 AM PST by TigerLikesRooster

Hedge funds try to hold back redemption wave

Tensions rise as some managers try to lock up investors' money for longer

By Alistair Barr, MarketWatch

Last update: 12:39 p.m. EST Nov. 28, 2008SAN FRANCISCO (MarketWatch) -- Hundreds of hedge funds will shut this year as an estimated wave of as much as $700 billion in investor redemptions crashes over the industry, but some managers are trying to hold back the tsunami.

At least 75 hedge fund firms, including GLG Partners (GLG) , Deephaven Capital Management, RAB Capital (UK:RAB: news, chart, profile) and New Star Asset Management, have put up "gates," suspended redemptions or unveiled a restructuring this year.

Preventing lots of investors withdrawing their money at once helps avoid selling assets at fire-sale prices and potentially relieves short-term market pressure. However, the trend is also raising tension between hedge fund investors, who may need cash quickly, and managers, who may be more interested in holding on to assets to protect their businesses.

(Excerpt) Read more at marketwatch.com ...


TOPICS: Business/Economy; Extended News; News/Current Events
KEYWORDS: crash; gating; hedgefund; redemption
It may be about time that they resort to "severed horse-head on the bed" tactics. It is not a normal business practice, but I know it can be more persuasive, and this is not the normal time.:-)
1 posted on 11/29/2008 4:24:52 AM PST by TigerLikesRooster
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To: TigerLikesRooster; PAR35; bamahead; AndyJackson; Thane_Banquo; nicksaunt; MadLibDisease; ...

Ping!


2 posted on 11/29/2008 4:25:42 AM PST by TigerLikesRooster (kim jong-il, chia head, ppogri, In Grim Reaper we trust)
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To: TigerLikesRooster

Is this thing goes badly, I’ll be happy a Republican isn’t POTUS. :)


3 posted on 11/29/2008 4:44:19 AM PST by CE2949BB (Fight.)
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To: CE2949BB

Why don’t Democrats pass the middle income tax cuts now? Bush would sign it. And they need to lower Cooperate tax rates, 35% is too much to do business, and at least matching McCain’s 25% would improve the economic environment, real genuine solutions rather than short term ‘bail-outs’ and ‘stimulus bills’


4 posted on 11/29/2008 5:17:49 AM PST by Son House (Mr. Ă˜bama, Your Tax Increases Are Decreasing Job Opportunities)
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To: CE2949BB

I have already heard from 2 people that they are getting stalled on getting funds that are theirs.
Don’t know if they are Hedge funds or not, but they want their 401’s and they are getting a tap dance.


5 posted on 11/29/2008 5:50:46 AM PST by ridesthemiles
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To: TigerLikesRooster

Die hedge funds die. They can’t implode soon enough.

Though the Wall St anarchists bear more responsibility for the derivatives mess. The 8 trillion dollar bailout may be bogus but most of it is an effort to contain the credit default swap and derivatives mess. Not so much the sub-prime mess


6 posted on 11/29/2008 6:19:50 AM PST by dennisw (Never bet on Islam! ::::: Never bet on a false prophet!)
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To: TigerLikesRooster

You would think for $800 billion we could at least get a new deck of cards from witch we could rebuild or economy with? We certainly are not going to get a currency with any real value.


7 posted on 11/29/2008 7:55:59 AM PST by Mark was here (The earth is bipolar.)
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To: ridesthemiles
“I have already heard from 2 people that they are getting stalled on getting funds that are theirs.
Don’t know if they are Hedge funds or not, but they want their 401’s and they are getting a tap dance.”

Some of us at work looked into getting our 401k money too. We were willing to pay the penalties but the Company said that we couldn't touch unless we were 55 years old or left the company. (quit, retire, etc)

So although the money in the 401k is “ours” we are not allowed to get at it. But of course more “donations” are acceptable.

Frankly I am beginning to understand the people who say get “it” now because you probably won't be able to later.

8 posted on 11/29/2008 8:42:41 AM PST by The Working Man (Any work is better than "welfare"!)
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To: Son House
Why don’t Democrats pass the middle income tax cuts now? Bush would sign it.

Question. Answer. They don't want Bush getting even a little credit for anything.

9 posted on 11/29/2008 8:49:23 AM PST by Mr. Jeeves ("One man's 'magic' is another man's engineering. 'Supernatural' is a null word." -- Robert Heinlein)
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To: The Working Man

It depends. If you left the company and your money is still in their 401k, you need to roll it over into an IRA. Then the money is yours to do with as you wish. If you’re still employed by the company, and the 401k is sponsored by them, then the French have a saying for your situation - “A so ell” (Say it slowly out loud with a French accent).


10 posted on 11/29/2008 9:24:00 AM PST by Hardastarboard (0bama IS a socialist - I don't care what the elite media poofters say.)
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To: Hardastarboard
Exactly.

I can truly say that life is a learning experience. I am 53 now and I am learning everyday. The latest thing of course is also the oldest thing I learned. When playing a game learn all the rules, because when somebody changes them in mid-game you can challenge them about it.

Of course with the government, (Federal, State, Local), the rules change so fast that you never can keep up.

It reminds my of Ayn Rand's Atlas Shrugged. When there are so many laws against so many things, you will break at least one of them every day. It's easier to keep the populace under control that way.

11 posted on 11/29/2008 9:37:58 AM PST by The Working Man (Any work is better than "welfare"!)
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To: Mark was here

Which witch do you wish?


12 posted on 11/29/2008 9:51:33 AM PST by B4Ranch (Forbidden subject on FR.com--> "How should people respond to a government of looters? ")
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To: The Working Man

Can you borrow against it?


13 posted on 11/29/2008 9:52:30 AM PST by B4Ranch (Forbidden subject on FR.com--> "How should people respond to a government of looters? ")
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To: dennisw

I run a (very small) “hedge fund.” All it means is that I will go long as well as short, will use options as well as futures, and state in my initial interview with clients “don’t give me your money if you aren’t prepared to lose 50% of it, or ALL of it if everything goes south at once.” If the fund loses 50%, I liquidate it and send them a check. I have been down almost 30% at one time, but never a forced liquidation. It is also on the rules that you can’t get your money back unless it is the Jan 1, and you have to notify me by Sep 15. Your losses are yours. Your gains are 30% mine. I make no moneys from funds under management. I also don’t take money from people I don’t know.

I am down 7% this year, after being up by over 46% before the PM collapse. I have been short banking stocks since March, and shorted the living pooh out of WAMU, Citi, and Fannie Mae.

I have only had two customers want their money out, but it was mid October, and I told them they would have to wait until next year, (I don’t want to establish precedents).

I think I am good at what I do. I expect to close out the year with my clients in the black, although minimally so.


14 posted on 11/29/2008 10:32:09 AM PST by slnk_rules (http://mises.org)
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To: The Working Man

Your company’s response to those who want 401 K redemptions NOW is not unusual. It is the norm. I would not give it to you, either, not just because I want to be a jerk, but because you can’t run a fund that way, with people jerking money out every time someone rings a panic bell.


15 posted on 11/29/2008 10:35:46 AM PST by slnk_rules (http://mises.org)
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To: B4Ranch
Which witch do you wish?

I dont know any more. I'm so confused. :)

16 posted on 11/29/2008 10:57:34 AM PST by Mark was here (The earth is bipolar.)
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To: TigerLikesRooster
Redemptions from hedge funds will add to selling pressure and limit any significant market rallies. In addition, many investors may be wise to take their capital gains this year rather than leave them subject to the tender mercies of the voracious Obama vultures circling the calender come January.

The usual "Santa rally may be rather muted this year.

17 posted on 11/29/2008 12:21:22 PM PST by hinckley buzzard
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To: The Working Man
Unfortunately I think the heyday of the 401k is over. If I had any money in such a fund I would not add to it now, or for the foreseeable future. The idea of tax deferral will end up as a cruel joke. The tax rates 20 years from now will be so much higher than they are today that deferring tax payments will turn out to have been a losing tactic. Take your money now, pay your tax, reduce debt, invest in physical assets, enjoy the fruits of your labors.
18 posted on 11/29/2008 12:27:40 PM PST by hinckley buzzard
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To: slnk_rules

Your hedge fund is OK and honestly run. But I curse the big ones for running up commodities and oil the last few years. Yeah I know there all kinds of hedge funds. I get a kick out of that nerdy looking Paulson whose hedge fund bet and won spectacularly betting against the health of sub prime mortgages. I guess he bet against securitized mortgages


19 posted on 11/29/2008 2:54:40 PM PST by dennisw (Never bet on Islam! ::::: Never bet on a false prophet!)
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To: slnk_rules

I am down 7% this year, after being up by over 46% before the PM collapse......

PM=Precious metals?


20 posted on 11/29/2008 2:56:39 PM PST by dennisw (Never bet on Islam! ::::: Never bet on a false prophet!)
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To: TigerLikesRooster

It’s been nice since those jackasses have been out of the oil market.


21 posted on 11/29/2008 3:01:55 PM PST by mysterio
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