The financial crisis left former hedge fund investors with a bad taste in their mouths. A lack of transparency and light-touch regulation meant that many funds nearly went bankrupt when the US housing market collapsed and took with it the mortgage-backed securities in which they were heavily invested. But losses are not the only thing souring investor sentiment on the subject. “Where investors got extremely disappointed was the fact that a lot of hedge fund managers gated, suspended redemptions and side-pocketed their illiquid assets, leaving clients unable to withdraw their money,” said Nadim Haidar, senior private banker at FFA Private Bank. “They were essentially at the mercy of hedge fund managers who dictate when they will get their money back.” He says that there are two possible reasons that investors were forbidden from cashing out of the funds: “It was a truly exceptional time and some managers justifiably locked up
