Blue Mountain Capital Management announced that it is suspending withdrawals from the $3.1bn Credit Alternatives Fund.
Although the credit fund is down only 2.4 per cent for the year to the end of October, investors have submitted significant redemption notices representing a meaningful percentage of assets under management.
The redemption request were attributed to fund of funds who themselves face liquidity pressures from their own investors.
Andrew Feldstein, the firm??s founder, said that if Blue Mountain were to sell into markets where valuations remain ??exceptional and unprecedented?, investors would be left with ??severe liquidation costs and a less liquid portfolio?.
Blue Mountain has come up with a plan to balance the interests of those who want out of the fund with those who are staying in.
However, if investors don??t approve, the firm warned ??we will likely suspend all redemptions until these illiquid markets abate?.
