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Liquidating hedge funds

opinion

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.

In either case, there are a few things that a hedge fund manager will need to do in order to ensure the orderly liquidation and winding down of the hedge fund. The hedge fund limited partnership agreement or LLC agreement part of the hedge fund offering documents will set out the manner in which the dissolution and liquidation of the fund will proceed.

Generally there will be some sort of liquidation and then final accounting. Liquidating hedge funds timing of these will be determined by the offering documents. A manager should first contact his hedge fund attorney to inform him of the plans to close down Liquidating hedge funds fund.

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