Polygon in move to cope with pullout by investors

Polygon Investment Management, one of London's largest and most activist hedge fund managers, has

Like many such funds, Polygon has seen a surge in redemptions during the credit crunch. The group called investors to reassure them that they will not be prevented from redeeming investments from the £4 billion fund.

Polygon operates a "stacked gate" policy that allows investors to register their wish to pull out funds but only permits a certain number of
them to do so, on a first come, first served basis.

According to co-founder Paddy Dear, this has created a potential problem during the credit crunch.

He said: "We think the stacked gate can create a prisoner's dilemma that can incentivise investors to put in redemption requests so that they do
not get caught at the back of the queue. We are voluntarily offering investors the chance to move to a new class of shares that will not have any gate. We believe other funds will follow our lead."

Dear added that the fund had received redemptions, but so far they had not triggered the stacked gate system. The fund has fallen
almost 4% in value so far this year while the FTSE 100 index is down just over 10%.