An attempt to placate investors by easing redemption terms may not have worked as expected by Eton Park chief Eric Mindich. At lest one large investor was opposed to the management’s proposal.
The changes were instituted last October, shortly after reports to the effect that New Mexico’s main public pension fund was pulling its money out of Eton Park. Performance concerns were not the only reason, according to a story at the time in trade publication HedgeFundAlert.
The main change Mr. Mindich made was to shorten the lock-up period. The effect varied by share class but for most investors it meant that starting in early 2013 they could get their money back in 21 months rather than having to wait three years for the lock-up to end.
Some clients thought the lock-up is still too long. One was quoted in the New York Post calling the lengthy wait to withdraw an insult to investors.
But there is another cause for discontent—the differences among share classes and how the terms for classes of shares were altered. The large investor opposed those changes. Inequities between shareholders are a sensitive matter.
Eton Park is not alone in facing such issues and withdrawal demands from major clients. The New Mexico pension also withdrew from Marathon and from Paulson & Co. earlier in 2012.
