Paul Tudor Jones Suspends Redemptions From Main Hedge Fund; Plans To Split Funds
Paul Tudor Jones, famous for predicting the 1987 stock market crash, has suspended redemptions from his $10 billion flagship hedge fund and, additionally, plans to split out toxic assets into a new fund with lower fees.
This news came from a letter that that Paul Tudor Jones sent to clients on Friday. In the letter, it also said investors wanted back 14% of their money at the end of the year. This would have left the remaining investors holding too large a proportion of illiquid assets, particularly corporate credit in emerging markets, the Financial Times reported.
The suspension is additional evidence that even successful hedge funds are being hurt by the rush for cash among investors, as the Tudor BVI fund is down only 5%, far exceeding industry metrics.
“I recognise that a restructuring is an unwelcome, but I believe necessary, step against the backdrop of Tudor BVI’s 22-year history of unbroken profitable years,” Mr Tudor Jones wrote. “I believe it is but a brief step, however, on the road to important long-term changes for the benefit of all investors.”
Tudor is in the process of splitting out the Raptor fund, run by James Pallotta from Boston, which has been hit by heavy withdrawals. Raptor was down 16% as of the end of October, the FT reported.
Illiquid assets will be split from the BVI fund into a new Legacy fund, holding corporate credits in Eastern Europe, Asia and Latin America, PE and hedge fund investments.
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