BOSTON (Reuters) - Hedge fund firm Tudor Investment plans to split its $10 billion (6.7 billion pound) BVI Global Fund into two separate funds and told investors they won’t be able to get their money out until after the restructuring is completed.
Paul Tudor Jones -- one of the world’s most prominent hedge fund managers, who founded the firm in 1986 -- said he plans to move assets that are difficult to sell right now into a new fund called Legacy. The more liquid assets will be kept in the Tudor BVI fund, he told clients in a letter last week.
The move comes at a time when the BVI fund, which makes big bets on economic trends, is down roughly 5 percent and investors have told management that they want to pull out roughly $1.4 billion, or about 14 percent of the fund’s assets, at the end of the year. The fund has posted average annual returns of 22 percent since it was founded 22 years ago.
“I recognize that a restructuring is an unwelcome, but I believe necessary, step against the backdrop of Tudor BVI’s 22-year history of unbroken profitable years,” Jones wrote in a letter obtained by Reuters.
In the meantime, Tudor told clients that redemptions would be suspended until the end of the first quarter of 2009.
Jones said he expects the Legacy Share Class will represent roughly 29 percent of Tudor BVI’s net assets as of March 31, 2009.
Tudor is the latest in a string of hedge funds to tell investors they can’t get their money back just yet as pension funds, endowments and others try to exit and the roughly $1.5 trillion hedge fund industry is posting its worst returns ever.
Many fund managers have blamed frozen credit markets and the collapse of investment bank Lehman Brothers for their recent troubles.
Tudor will ask BVI Global clients to agree to vote on the planned restructuring in the next months.
Reporting by Svea Herbst-Bayliss, editing by Gerald E. McCormick
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