Polygon Junks Redemption Restriction

Apr 3 2008 | 12:02pm ET

London activist hedge fund shop Polygon is relaxing its redemption policy in the face of a slew of withdrawal requests.

The US$8 billion fund has decided to junk its first-come, first-served redemption system that limits the number of investors who can redeem at any given time. Instead, investors will be able to move their money into a new share class without the “stacked gate” restrictions.

“We think the stacked gate can create a prisoners dilemma that can incentivize investors to put in redemptions so they do not get caught at the back of the queue,” Polygon co-founder Paddy Dear told The Telegraph newspaper. “We are voluntarily offering investors the chance to move to a new class of shares that will not have any gate. We believe other funds will follow our lead.”

Though the firm made the move to cut down on redemption requests, it insists that it does not face a huge number of withdrawal demands. In spite of the reportedly large number of investors seeking to redeem, Dear said that the gate limit had not been reached.

Polygon is down about 4% this year.


In Depth

Q&A: Rotation Capital's Rothfleisch On SPAC 2.0

Aug 11 2017 | 7:43pm ET

Corporate actions have long been a staple of event-driven investors, but activity...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Star Mountain Capital: Private Lending in the Lower Middle-Market

Aug 14 2017 | 4:45pm ET

Private credit has become one of the most popular alternative asset classes in recent...

 

From the current issue of