Moab Junks Gate, Side-Pocket Provisions

Mar 29 2010 | 11:31am ET

Moving to reassure investors, New York-based hedge fund Moab Partners is foreswearing redemption gates and side-pockets, even though the firm has never imposed them.

The event-driven fund, headed by a pair of former Perry Capital managers, previously included a provision that allowed both gating and moving illiquid assets into side-pockets to avoid forced selling of distressed assets. Andrew Stotland, director of business development at Moab, told HFMWeek that both “were originally introduced to protect the limited partners.”

“Unfortunately, in 2008, many of our peers abused these investor protections,” he explained. “The investor community fought back and rightly so. We never adopted any of these practices, but we wanted to go one step further.”

Removing the gate and side-pocket provisions—in line with broader industry moves towards greater liquidity and transparency—is designed to “remove any doubt from investors’ minds and show them that our interests as general partners are truly aligned with theirs as limited partners,” Stotland said.


In Depth

Star Fund Managers Battered By Rocky Ride In Yields, Currencies

May 28 2015 | 6:05am ET

Some of the biggest names in the investment world have been whipsawed by the recent...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

The Road To Tax Alpha

May 28 2015 | 5:36am ET

Tax-related alerts are increasingly helping investment managers harvest tax alpha...

 

Sponsored Content

Editor's Note