You’re right that many hedge funds have lock up provisions. But not all of them. This goes back to the idea that each fund should stand on its own merit and one of the things investors should know before investing would be lockup requirements (as well as strategy, leverage, reporting, etc.)

For whatever its worth, many mutual funds also have lock up requirements with significant penalties for early withdrawals.

Thanks so much for the comments guys!
Zach

This is a very detailed and comprehensive article.

The only think I would add is that some hedge funds have “lock up” periods (1 year or 25 months, for example). During that period, you can’t withdraw your money.

By contrast, you can sell a mutual fund at any time, if you no longer want to invest in it.

Thanks. Great info! The one thing that always separates the structure from the investment conversation for me is the idea of a glass. When you fill a glass with water and drink it, it is nourishing and quenching. So, it is good for you!

If you fill that same glass with arsenic, it will kill.

So, if you look at it, it was not the glass that hurts you, it was what was in it. The same is true with a hedge fund. It is the investments and the strategy, not the hedge fund container that is the potential problem.

You were great on this week’s episode!!!

Andrew