Are hedge funds liquidating
Talk with the hedge fund service providers A manager should first contact his hedge fund attorney to inform him of the plans to close down the fund.
The lawyer will be able to help guide the manager through the process and will be able to help with any issues which may arise.
The auditor, broker and administrator should also be contacted so that these service providers can begin their own processes for winding the fund down.
During the wind down process, the manager should expect to talk with each of the service providers a few times.
Generally there will be some sort of liquidation and then final accounting.
The timing of these will be determined by the offering documents.
Businesses are best known to liquidate assets as a part of bankruptcy procedure, but the process can also be used by businesses to free up cash, even in the absence of financial hardship.
It has been a tough year for many managers and there are many funds that will be shutting their doors before the end of the year.
Funds may decide to close their door for many reasons which might range from poor performance to large amounts of investor withdrawals.
While many of the managers and traders at these funds will go on to work for other firms, many of these managers and traders will start new hedge funds and potentially with some of the same investors.
Liquidate means to convert assets into cash or equivalents by selling them on the open market.2.
When an entity chooses or is forced by a legal judgment or contract to turn assets into a "liquid" form (cash). An individual may choose to liquidate his or her possessions or investments to pay off creditors, convert assets to cash for spending or because the investments are not going to increase in value and the investor wants to re-allocate funds.2.