Transparent Investments In Hedge Funds Via A Managed Account Platform
Mondaq Business Briefing › Germany Law Articles in English (2012)
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Transparent Investments In Hedge Funds Via A Managed Account Platform
Introduction
During the financial crisis of 2008, many hedge fund managers ("HF Managers") exercised their rights to restrict fund liquidity, using their frequently underestimated legal powers to put in place gates, suspend redemptions and even segregate illiquid fund assets for years in closed-end vehicles (so-called "side pockets"). Among other factors, this resulted in a substantial deterioration of liquidity for investors. Single security deposit accounts held in trust (so-called "segregated managed accounts") emerged from the crisis as a favored structural solution, as they not only offer investors full transparency but also an effective protection against the above-mentioned liquidity constraints. In a segregated managed account, the portfolio's liquidity deriv...See the full content of this document
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