Hedge Fund Giants D.E. Shaw, Farallon Block Redemptions

Dec 4 2008 | 10:47am ET

The bad news for the hedge fund industry continues to snowball, with two of the largest hedge funds in the world imposing redemption restrictions.

New York-based D.E. Shaw Group and San Francisco-based Farallon Capital Management have placed gate limits on withdrawals, Bloomberg News reports. They join dozens of other hedge funds that have restricted how much their investors can pull—or barred redemptions altogether—as the market volatility continues to take the industry on an unpredictable ride.

D.E. Shaw, which manages some $36 billion, saw a gate provision on its Oculus Fund triggered when it received redemption requests totaling more than 8% of the fund’s assets, despite the fact the fund has bucked the industry trend toward double-digit losses this year. In fact, the fund is up about 10%.

Farallon’s Institutional Partners fund has not been so lucky. It imposed the redemption limit—which it said it may lift as soon as next month—after investors tried to yank about a quarter of its assets. The fund is down 23.8% this year.


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