UK - Pension funds invested in London based hedge fund CQS's Feeder Fund have voted to have part of their redemption notice period extended from 90 days to 12 months.
The fund said this related to a third of its existing invested capital. CQS consulted existing investors, who voted to convert the fund, with some taking the option to keep an allocation to the segment which kept the 90 day notice period.
Michael Rummel, head of communications at CQS, said: “We have extended this notice period to provide greater flexibility and enhance the fund’s liability management framework.”
Rummel continued: “The presence of more stable capital should provide opportunities under different market conditions.”
He added: “By having a third of the fund’s capital in a 12 month share class, the fund can access a broader range of investment opportunities.”
CQS cited that some of the best opportunities occurred at times of market dislocations, which provided attractive potential investments at a time when market performance was poor.
Taco Sieburgh Sjoerdsma, director of research at hedge fund research outfit, Liability Solutions, said a longer tie-in period was not uncommon, but a split structure was a fairly new phenomenon.
Sjoerdsma agreed the liquidity of underlying investments should match that of the fund.
He continued: “Changing liquidity terms would be more easily achievable for large funds which are in demand than for smaller, start up operations.”
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