Blocked exits can be costly at hedge funds-paper

Hedge fund investors may face an expensive tug-of-war with managers, according to a new research paper that suggests they could lose as much as 15 percent of their initial investments should they be unable to exit when they want.

This is as we've suspected. While it is a good idea in theory to block redemptions to prevent asset value loss through "forced" redemptions, the problem is that slowing down the redemptions assumes that in the near future prices (or at least liquidity) will be better. So far, this has not been generally true. And we don't think it will get better for a long while.