Appaloosa Loosens Lockup For Some

Jan 5 2011 | 9:46am ET

David Tepper understands that there can be too much of a good thing.

The Appaloosa Management chief has allowed some of his investors to redeem early, prior to the expiration of the Thoroughbred Fund’s three-year lockup. For a fee, of course.

Tepper said that some institutional investors had asked to redeem some of their shares after the fund nearly doubled in value in 2009 and returned another 22% last year, leaving their hedge fund allocation out of whack.

“We have become so big for people’s baskets,” Tepper told The New York Times. “If your investor base has a problem—in this case it was a good problem—we try to accommodate them. Your investors are your customers after all.”

Tepper said Appaloosa was “being nice,” but wasn’t being entirely magnanimous: The firm offered space in the fund to investors in its Appaloosa and Palomina funds, and quickly found money to replace that being redeemed. And redeeming investors will pay a fee for getting their freedom a year earlier, which will be paid to remaining investors.

Throroughbred has about $3 billion in assets under management.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of