Much has been written about hedge funds’ last-minute attempts to avoid registration with the Securities and Exchange Commission. One widely reported tactic has been to increase the length of time in which investors’ money is “locked” into a fund beyond two years. But an ambiguity recently arose over whether such restrictions apply to partners’ money.
“You would be surprised by the number of managers who thought they wouldn’t be locked up,” says one industry veteran. “They don’t see their participation as an investment.”
