Hedge-fund investors could seek redemptions amid coronavirus pandemic - Business Insider

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Hedge funds' biggest investors might have to sell out regardless of performance. Here's why one investor is 'deeply worried' about the business risks the industry is facing.

EJF Capital founder Emanuel Friedman has paused redemptions on his $2.5 Debt Opportunities hedge fund.Hedge funds have, on average, weathered the market turmoil caused by novel coronavirus relatively well — with a few types of funds producing some of their best returns in years.

Hedge-fund investors sticking with the industry meanwhile must now be cognizant of the business risk facing many managers that might lose big chunks of assets for reasons unrelated to their performance. While Friedman is not dealing with a mad rush to the door, though his fund was down 15% in March, hedge-fund investors are wary that redemptions are coming from regardless of performance — adding another concern to a long list of them.that helped institutionalize the business"This will produce a significant liquidity crunch for a lot of end investors," said Craig Bergstrom, chief investment officer of fund-of-funds Corbin Capital.

Endowments for hospitals meanwhile are going to be pushed to the limit with the additional stress placed on the healthcare system by the novel coronavirus pandemic. University endowments have been floated as a way to provide for students suddenly thrown out of housing and school.

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Hedge funds are buying again and are likely to return to these old, favorite stocks'The de-risking by hedge funds seems to be behind us and if the market marches higher, we think hedge funds go back to their 'tried & true' names,' Jefferies said in a note to clients. Pro Dear Middle class the media scared u into believing that u were going to die, they closed everything, u got laid off, u sold your stocks to pay your bills-the market goes up but u are left with nothing -hedge funds bought your stock -the market doubles-Rich get richer UGOTROBBED
Source: CNBC - 🏆 12. / 72 Read more »