LONDON (Reuters) – Hedge funds under pressure from a combination of tightening credit lines, illiquid investments and investor redemptions are increasingly moving to stem investor outflows, industry experts told Reuters on Thursday.
An increasing number of funds are using gates — which can typically limit investor exits to between 10 and 25 percent of assets per quarter. Alternatively they are suspending investor redemptions entirely so the managers don’t have to undertake a fire sale of assets in difficult markets to pay exiting investors.
"We see a lot of situations that aren’t total write-offs but where it’s more a question of suspending dealing or a gate," said one fund of hedge funds manager, who declined to be named. "These situations are increasing."
