any one else put it down as a reason the hedge fund was not app’t for the foundation in the am? I put it out there bc I thought of it as soon as I read in the vignette that they only had one person on the admin. staff. Why else would they say that?? hmmm… I hope it was a valid reason…
Hi akanska, thanks for the list yesterday. Although I don’t like my chances. I put that the min investment requirement for the HF of 2.5MM would blow their max 5% of assets in any one investment. No idea why they mentioned the one employee thing. I just added an unknown admin % to their return requirement. This is one of the few questions I did that I think I did OK on. It was directly after this I saw how many questions there were and I’d already blown over an hour. It kind of fell apart after that.
I put that too- but the question asked for 2 reasons. I had put down a liquidity issue bc of the lock up period, but than decided to put the due diligence instead (in add’n to the max concentration issue). Credit goes to all- I just pasted them all together in one place- JScott did most of the work.
was there something about the HF being private equity and had a 5 year lock up period which the text says is too short
My second reason was that the lock-up period would put unreasonable liquidity constraint on the rest of the portfolio, calculated it at north of 7%.
sorry akanska, just saw you already mentioned this. I need a long vacation somewhere. my second reason was the lock up but can’t remember if I said it should be 7 years (as per the text) or if I said 5 years was too long
I also put the Lock up period would create an increased drain for income generation from the remainder of the asset base. I may have included a rate that woudl be required form the remaining assets which seem extremely high. THe first reason as everyone else seems to be stating is the violation of the mandate regarding 5% in any single issuer.
akanska…I put the exact same thing
I figured the minimum investment of $2.5m precluded it as the foundation was $10m with a maximum of 5% in any one asset. You maybe right on the DD thing as well. Good luck
Yep, went with lock up and 25% of the fund.
lockup greater than 10% restriciton