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Infinity Q Capital Management Plans to Return $500 Million to Mutual-Fund Investors

edited June 10 in Fund Discussions
“Infinity Q Capital Management says it plans to return approximately $500 million to investors who were unable to get their money back after the investment firm halted redemptions on a then-$1.7 billion mutual fund earlier this year. It remains unclear how much investors will eventually recoup from the Infinity Q Diversified Alpha Fund. The fund currently has around $1.3 billion on hand—well below where it was last valued in February—and it will keep $750 million in reserve …

“(The) firm unexpectedly halted redemptions in February and said it couldn’t value its holdings. The move stunned market participants, some of whom viewed their investments in the fund as a hedge to their broader portfolios. Infinity held wide-ranging bets across stock, currency and derivatives markets, including over-the-counter positions … Infinity appeared to have misvalued its large derivatives portfolio. Some of the valuations it disclosed were too high and, in one instance, mathematically impossible.”

From WSJ June 9, 2021


  • I don't understand why. I thought there were reasons for it's opaqueness.
  • A little more background info....
    The fall of the almost $2 billion Infinity Q Diversified Alpha Fund is a reminder to investors about the risks that can lurk in their holdings and the heavy costs and frustrations that liquidating funds bring.

    What's in your mutual fund? The collapse of Infinity Q is a warning to investors
  • Multi-alternative funds tend to be pricey, complex, and opaque.
    They may use combinations of various strategies: long/short equity, interest rate/currency bets, derivatives, commodities, arbitrage, etc. Many investors don't understand how these disparate strategies interact or the actual risks involved. To add insult to injury in the IQDAX liquidation, $750M of investor's money is being set aside to cover potential lawsuits.
  • You are left wondering who is really worse in such situations...the vulture-like lawyers, or the incompetent/negligent/deceptive Fund Mgr? Class action lawsuits eat up a lot of assets.
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