Stark To LPs: "Redeem This"
Bloomberg recently reported that Cerberus Capital Management is considering the creation of a "redemption fund," for investors who have asked to withdraw their money. It's basically a pay-in-kind solution to deal with Cerberus' lack of liquidity. Not ideal -- particularly if you want Cerberus to satisfy you like an ATM -- but at least the goal is to get everyone paid (eventually). For contrast, peHUB has learned that Wisconsin-based hedge fund manager Stark Investments has enacted a far more onerous pay-in-kind solution. In a March 23 letter, Stark informed investors that it has created new funds to hold its illiquid (read: toxic) assets. Redeemers now are eligible to receive just 50% in cash, and the other 50% as securities in the new toxic funds. As the letter read, in part:
