Israel Englander extends lock-up period could be yet another bearish indicator that this aging bull market and the economic cycle may have peaked.
Israel Englander, Millennium fund which profits from high-frequency trading (HFT) and Citadel are two funds that have managed to stand apart from the “deplorable 2 and 20 herds”.
This is where hedge fund managers charge 2% management fees on top of 20% on the profits they generate. But that is little beer, compared to James Simons Renaissance Technologies HFTfund which creams 40% of investors winnings.
So now you know why the hedge fund bosses are starting to crowd the Forbs rich list.
“Name me another industry in the world that has a management fee like this. If a manager has skin in the game, why would he create larger costs that are unnecessary”
ISRAEL ENGLANDER
But Israel Englander extends the lock-up period from one to five years is somewhat unusual for the billionaire investor who previously touted himself as able to deliver alpha returns with the lowest costs. Israel Englander argued that top investors make profits from investing and not unnecessary “management fees”.
“Name me another industry in the world that has a management fee like this. If a manager has skin in the game, why would he create larger costs that are unnecessary” said Israel Englander?
Israel Englander extends lock-up period means that one way or another the money manager is going to be charging his investors more for his service.
So raising Israel Englander solid performance over the last couple of years has succumbed to extending the investor’s lock-up (redemption period) to five years.
The news that Israel Englander extends lock-up period was “gently” broken to Millennium fund investors.
“If a manager has skin in the game, why would he create larger costs that are unnecessary”
ISRAEL ENGLANDER
Millennium first told investors that they would get their profits early this year and then came the zinger. Millennium told investors that to reinvest these profits, they would be required to sign up for a new share class that would extend their redemption period from one to five years.
The news that Israel Englander extends lock-up period was “gently” broken to Millennium fund investors.
Millennium first told investors that they would get their profits early this year and then came the zinger. Millennium told investors that to reinvest these profits, they would be required to sign up for a new share class that would extend their redemption period from one to five years.
“Nothing says top, like lock-up” – Anonymous trader
So Israel Englander extends the lock-up period, reading between the lines, would rule out forced sales during say a recession. Extended lock-ups prevent large-scale redemptions in bad times and thereby provides the hedge fund with private equity-like lock up.
Israel Englander extends lock-up period is the writing on the wall for some traders.
“Nothing says top, like lock-up” said one trader who wished to remain anonymous.
But just as Israel Englander extends lock-up period it also means that investors can’t head for the exit if the star investor leaves.
Curiously the new share class at Millennium no longer lists its founder Israel Englander as a “key man”. In other words, Israel Englander can now leave Millennium before the lock-up period and investors can’t take their money out of the fund.
“Millennium averaged 10% annually and was up 8.3% for the year”
– according to the Wall Street Journalay Dalio
Israel Englander extends lock-up period could frighten investors away?
Unlike most rivals, Millennium can make this aggressive demand because they both have a backlog of investors who want to invest with them.
Very few in the industry can show consistent returns, Israel Englander is one of them. Millennium averaged 10% annually and was up 8.3% for the year, according to the Wall Street Journal.
