Industry luminary slams hedge funds

If something sounds too good to be true…

John Paulson, chief of Paulson & Company, has criticised the growing trend on the part of hedge funds suspending redemptions, according to a report in The New York Times.

“We think it’s a mistake for managers to use gates and other tools to limit investor access to their funds,” Paulson wrote in a 2009 outlook to investors obtained by Bloomberg News.

He expressed surprise over managers restricting redemptions in cases when the requests accounted for a quarter or less of assets under management, as cited in the NYT report.