GoldenTree Says Redemptions Will Be Paid In Illiquid Securities

Jan 15 2009 | 2:05am ET

GoldenTree Asset Management, facing huge redemption requests, is responding with something of a threat. The New York credit hedge fund is not choosing the well-worn path of a withdrawal limit or suspension, but is instead offering to repay investors in kind.

GoldenTree told investors last month that those withdrawing their investments would receive securities in lieu of cash. The hedge fund invests primarily in credit derivatives, many of which are highly illiquid and would be difficult for investors to sell on the open market.

“Withdrawing partners that do not elect to revoke their withdrawal request will receive their proceeds primarily in kind,” GoldenTree wrote, according to the Financial Times. “It is unlikely that any cash will be distributed.”

“We can provide no assurances that these assets will be saleable and will no longer provide any management oversight or advice regarding such assets,” the letter went on.

The firm saw its hedge fund fall by almost one-third last year, and has received redemption requests totaling between 25% and 30% of what’s left.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

The healthcare sector went on a tear beginning in 2011, thanks in large part to the passage of the Affordable Care Act and its impending implementat