Tudor - BVI Global Fund - global macro

The losses on Tudor's flagship fund are not that bad -- 5% on the year, compared with 18% for Hedge Fund Research's Multi-Strategy Index -- but apparently the 14% of AUM redemption requests are not meetable given the funds proportion of "illiquid" assets:

“Creating a separate fund will give the original fund the opportunity to generate better returns minus the toxic assets that have acted like a sea anchor,” said James Chirnside, chief investment officer at Sydney-based Asia Pacific Asset Management Pty Ltd., which invests in hedge funds.

As the quote implies, a separate fund will be created to hold the "illiquid" assets, called "Legacy":

Legacy will account for about 29 percent of BVI’s assets as of March 31, 2009, according to the letter. It will include emerging-market corporate credit debt, which has “ceased to be tradable,” as well as investments in private equity and hedge funds.

Here are the terms:

Clients would have their money allocated between BVI Global and Legacy based on the division of assets.

...

Tudor won’t charge investors a performance fee until the Legacy assets exceed the high watermark, or peak value, of the BVI Global fund. The firm would sell off the assets in Legacy next year and return money to clients, who will be charged a performance fee of 1.5 percent instead of the industry standard of 2 percent. Redemptions for BVI Global will be suspended until March 31.

Tudor has two other funds that have actually shown gains on the year -- click the Bloomberg article above to read more.