Paloma Partners is restructuring to address $1.2 billion in redemption requests while facing challenges in liquidating assets. The hedge fund plans to pull $600 million from backed hedge funds like Aquatic Capital, a quant firm it launched in 2019. Paloma has also created a special-purpose vehicle, Dove, to manage commercial-mortgage-backed securities valued at $240 million. Despite its recent struggles, Paloma is reporting a modest 2.5% gain in 2024, emphasizing the challenges it faces in balancing investor demands with asset liquidity.
Paloma Partners, facing $1.2 billion in redemptions, is restructuring to return cash to investors, including exiting investments like Aquatic Capital and selling commercial-mortgage-backed securities.
Paloma's liquidity challenges highlight the complexities of hedge fund operations, as it navigates longer redemption timelines while attempting to manage harder-to-sell assets effectively.
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