Interview with Gemini Strategies’ President Steven Winters on the Split of the Gemini Master Fund into Continuing and Redeeming Funds

In the mist of the liquidity crisis of 2008, Steven Winters, President of Gemini Strategies and Portfolio Manager of the Gemini Master Fund Ltd (an investor in small-cap and micro-cap U.S. companies), took a novel approach to a substantial wave of redemption requests.  Rather than using any of the typical liquidity management tools such as gates, redemption suspensions or payments in kind, Winters and his advisers split the fund into a continuing fund and a redeeming fund.  The move enabled the fund to return cash to redeeming investors, generate considerable returns and retain relationships.  It was a creative structure and a good outcome, and can offer a model for any hedge fund faced with heavy redemptions (which can happen even when the macro environment is positive).  The Hedge Fund Law Report recently discussed with Winters the background, rationale, mechanics and outcome of the split.  The full transcript of that interview is included in this issue of the Hedge Fund Law Report.

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