No one wants to be invested in an underperforming hedge fund right now — and half of the hedge funds in America are underperforming. What happens when investors decide to take their money out tomorrow, as they’re generally allowed to do on the first day of any quarter?

Sources said they expect the body count to total as many as 2,000 hedge funds and 500 hedge funds of funds between now and the end of March…

Most hedge funds operate on an end-of-quarter deadline for requests from clients to have their money returned. If experts’ predictions of very large collective redemptions come true, managers will have to liquidate their holdings en masse, pushing down prices and forcing many smaller hedge funds or those with poor returns out of business. The wave of closures could span six months, likely beginning in earnest in November and December at the end of the typical 45- or

65-day waiting period when fund managers have to return investor cash.

http://seekingalpha.com/articl…..oe-to-drop

This started as a comment on Suz’s thread sept 30

I wonder why Bush, McCain, and Obama never once said anything about the Hedge Funds being in trouble? Does this mean that we need more money to bail them out too?
I wonder if the slacker MSM will cover this story before the bailout vote?
The snotty New York Times lady on MSNBC or was it CNBC tried to imply yesterday that people opposed the bailout but nobody had checked it out on the website.
Patrician lectures the Plebes ARGGGH! Funny how the Times Lady never once reported this story though. The Judy Miller school of reporting what you are told is still strong at the Grey Lady.
Please see my previous Diary about Hedge funds yesterday for more background if you are interested.
These Diaries rock I can save my best comments from Late Late Nite!