Hedge Funds Hold Investors ‘Hostage’ After Rebound

“We don’t object to the illiquidity,” Papastavrou said in an interview. “We object to how some managers are abusing the situation and holding investors’ money hostage to generate fees.”

About $77 billion in hedge fund assets that were frozen during the credit crisis are still restricted, according to estimates by Credit Suisse Tremont Index LLC, even after the biggest stock-market rebound since the 1930s and a record rally in credit markets revived demand for some assets considered illiquid a year ago.