Tudor Investment Corp. in the first quarter will ask investors to approve a restructuring of its $10 billion flagship multistrategy hedge fund, BVI Global Fund, according to an investor letter obtained by P&I Daily.
In response to difficult market conditions and $1.4 billion in client redemption requests for Dec. 31, the funds board temporarily suspended redemptions until March 31, 2009.
If the restructuring is approved, the fund will be split on March 31 into a liquid and an illiquid master fund, each represented by a different share class. Shares of the liquid Tudor BVI Master Fund will be subject to the firms normal redemption terms while the illiquid Legacy Master Fund cannot be voluntarily redeemed by investors.
The illiquid portion of the BVI fund are primarily private equity investments and uncalled capital commitments, some of which now are not tradable, according to the investor letter. The illiquid portfolio will represent about 29% of the funds assets on March 31.
The firms founder, Paul Tudor Jones II, wrote to clients that we expect that distributions from this class will be made to investors quarterly as realizations/liquidations occur of underlying assets, and that the first distribution likely will be on June 30, 2009.
Steve Bruce, a Tudor spokesman, declined to comment about the BVI Fund restructuring.