Billion-dollar Hedge Fund Faces Risk of Fund Liquidation
A multi-billion dollar fund faced multiple challenges converging on management. A former partner had been criminally indicted; both regulators and law enforcement questioned the fund’s investment practices; market conditions had deteriorated, which undermined valuations. The news media swarmed in creating a reputation risk, and redemptions from investors had built as they lost confidence in the fund.
We created a strategy and plan for investor communications that began with a new “narrative” on why management was in this position and what it would do to serve the best interests of investors. That included a plan of liquidation. In the plan, a series of investor letters was scheduled to level set expectations and be sure investors were kept up to date.
We got control of the media coverage and worked closely with legal counsel and other third-party advisors on the liquidation. Investors knew what to expect as we built new confidence in management. The news media coverage improved in tone and accuracy and purely negative and factually wrong stories diminished. Management was able to focus on the plan of liquidation.