Media misleads with Cerberus Hedge Fund Three-Year Lockup Announcement

Filed in archive Hedgetalk on September 3, 2009

This morning on the HedgeCo hedge fund blog, Aaron posted this interesting piece on Cerberus and the new three-year lock up policy that they instituted for their new hedge funds. The article points at the main stream media who insinuate that the new lockup they instituted will affect existing investors.

One of the main misconceptions with most of the articles presented in the media is that the Lockups will affect existing hedge fund investors. This is not the case, as the Lock-Up period will only be effecting new funds created by Cerberus Capital in the future.

To balance out the 3-year lock-up, the new Cerberus funds will be offering lower management fees. The success of this new structure will no doubt be watched by hedge fund managers around the world.

As announced by Financial times these 3-year lock ups will apply to two new funds, Cerberus Partners II and Cerberus International II. These funds are slated to open in Q4 of 2009.

Aaron goes on to explain how Hedge Funds use Lockups in structuring their fund and investment strategy.