Fund of Hedge Funds Managers Have New Tool to Monitor Liquidity

The functionality is available to Northern Trust’s Funds of Hedge Funds clients worldwide, through its Hedge Fund Monitor product, which is available through Northern Trust’s relationship with financial applications company youDevise Limited, according to a press release.

Northern Trust explained that gates are set up by hedge fund managers to limit redemptions from the fund, preventing a run on the fund, which could force the manager to sell off positions to generate cash to meet redemptions. The new feature enables Northern Trust Hedge Fund Monitor to incorporate all such gating terms into the liquidity calculations, so managers automatically know how much and when they can access cash from their underlying hedge fund investments, the announcement said.

Northern Trust noted it already has the capability to model underlying hedge fund redemption and fee terms, enabling users to generate reports showing amounts that could be liquidated in a given number of days and at what cost, taking into account redemption notices, penalties, lock-ups and other terms.

More information is at http://www.northerntrust.com .