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Not So Golden After All

So what happens exactly when, in response to your withdrawal request, you get this:

...withdrawing partners that do not elect to revoke their withdrawal request will receive their proceeds primarily in kind. It is unlikely that any cash will be distributed.

Well, if you signed a subscription agreement that gave the hedge fund you were investing in the right to meet redemptions "in kind," like many Golden Tree Asset Management investors did, you sit back and wait to receive your toxic debt (and perhaps argue about its valuation, since I doubt they sent you the good stuff).
Sez the Financial Times:

GoldenTree was down more than 30 per cent in 2008 and is facing demands from investors for about 25-30 per cent of their money, according to the person with direct knowledge of this. Historically, this person adds, GoldenTree tried to keep 80 per cent of its investments in easily tradable securities and 20 per cent in less liquid investments. But recently, as the markets lurched, that ratio flipped.

It's all very funny really. That is, unless you are the one asking for redemptions.
GoldenTree fund invokes clause to pay investors in kind not cash [The Financial Times]


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