CNN Money- Investors are expected to hit hedge funds with a flood of redemption requests this fall, but those who try to withdraw their money may be in for an unpleasant surprise.
Most hedge funds have “lock-ups,” a minimum period of time during which investors agree to tie up their money and not make any withdrawals.
Once that period ends, investors generally can redeem their stakes as long as they give advance notice, usually 45 to 90 days before the quarter end. Although that cut-off has passed for many funds for the current quarter, investors can still put in requests to get their money out by year-end.
But hedge funds also can slow withdrawals, or suspend them altogether. While they’re usually loath to do this, since it can signal that a fund is on the verge of collapse, current conditions may result in more funds not letting investors take their money out – at least not immediately.
