It must suck if you were a hedge fund investor that is being told here is $0.70 on the $1.00 after you have already tanked for a 23% loss for the year. Also people have already pulled money out in record numbers:
The $10 billion Harbinger Capital Partners Master Fund tumbled 23 percent this year through November, after being up 43 percent as of June 30, said the people, who asked not to be identified because the information is private. New York-based Harbinger will put the fund’s private-equity holdings, about 15 investments, in a side-pocket, or segregated account, so they don’t have to be sold at distressed prices.
Now that is one volitile fund. It went from up 43% to down 23% in 6 months. So that is a 66% downward move since June. I wonder if some of this was because of the curbs on short selling or was it just a domino effect that was due to redemptions earlier in the year? They had to settle those redemptions and to do so they had to empty out all the winners. This sent the price of those winners rolling downward like an avelanch. At least Harbinger is letting people pull their money out.
Hedge-fund firms including Tudor Investment Corp. and Citadel Investment Group LLC have suspended all redemptions.
That means some big money investors will have chunks of their money frozen at a paper loss and they will be unable to touch it. I would hate to have money that I entrusted to a fund manager frozen in that fund at a big loss. Plus, alot of the leverage tricks that these funds used to make big money might be dead so the chances of getting your money back are even slimmer.
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