Strategy Deviations or “Style Drift”


Hedge Fund Fraud Attorneys Explain Strategy Deviations or “Style Drift”

Sometimes a hedge fund portfolio manager will decide to change the investment strategy of the fund after he has gathered investor assets. Depending upon the offering documents, so long as the manager is transparent about this shift and gives investors a chance to redeem at a fair price before making the change, a change in strategy is permissible. However, if the manager makes a fundamental change, for example from one asset class to another, without disclosing the change at the proper time, this is known as “style drift”. When “style drift” takes place, the portfolio manager can be liable for any resulting investor losses

If you believe you may have suffered a loss as a result of a portfolio manager’s strategy deviation, or “style drift,” contact our law firm today. We offer free, initial consultations with experienced hedge fund and securities fraud attorneys.