In the NYT today, we learned that $9.2bn hedge fund Aramanth Advisors took a bath on its investments in Natural gas. Bad news...for everyone? It really seems like this was avoidable, based on late spring/early summer movement in natural gas, so that's not good news for fund investors.
I'm sure no investor would want to sit idly by. So, he runs to the fund and asks to withdraw his investment. However, there are strings attached. The NYT correctly describes Aramanth's withdrawal policies as "draconian."
"[i]nvestors can withdraw money only on the anniversary of their investments and then, only with 90 days’ notice. If they try to withdraw at any point outside that time frame, they face a 2.5 percent penalty. Even more draconian, if investors redeem more than 7.5 percent of the fund’s assets, Amaranth can refuse further withdrawals."
Ouch!
I think maybe I don't have the stomach for that at this point in my life.