Eton Park Clings To Tough Lockup, Redemption Terms

Jan 19 2012 | 1:17pm ET

While many top hedge funds have eased the lockup and redemption terms that made many infamous during the financial crisis three years ago, at least one is sticking tightly to the onerous rules it put into place when it launched more than seven years ago.

Eton Park Capital Management continues to give investors a chance to redeem only once every 27 months—if an investor misses a window, he or she must wait another 27 months. In order to do so, they must give 65 days notice, and can only pull one-third of their money any year. Those that do redeem must wait another month after the redemption date to actually get their money, Fortune magazine reports.

What's more, Eton Park still reserves the right to employ one of the most hated features of the hedge fund industry: side pockets. And it can put up to 30% of its assets in those side pockets.

That may be why the $12 billion firm saw only 5% net redemptions last year, despite break-even performance over the past three years and an 11% loss last year.

"We are redeeming as much as we can and as fast as we can," one investor, who gave Eton Park his money in 2008, told Fortune.


In Depth

OmniQuest Capital: Why Funds of Hedge Funds Work

Aug 11 2016 | 4:47pm ET

There have been few sectors of the alternative investment universe under as much...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...