The hedge fund is one of a number of investment entities to have shut doors to clients trying to pull money out. In the case of this particular fund redemption requests so far have been low, but the managers wanted to prepare against potential pullouts.

Hedge fund EJF Capital has told clients that it is suspending redemptions from one of its funds for the foreseeable future because it did not want to be a forced seller amid difficult market conditions, according to the Wall Street Journal earlier this week.

The $7 billion EJF, founded by Emanuel Friedman, told clients in a letter last Friday that it was halting any withdrawals from its Debt Opportunities Fund. That fund managed $2.5 billion at the end of February, the publication said. While the fund received redemption requests totaling only 6 per cent of its assets under management for March 31, the letter said that it wanted to “protect all of the Fund’s investors by not selling assets into a nonfunctioning market.”

The “gating” of redemptions is an example of how investment managers around the world have had to consider such actions amid turbulent markets. In the UK, for example, a number of open-ended real estate funds have halted redemptions, raising questions about liquidity/risk mismatches for certain asset classes.

The report said that the fund will review the suspension on a quarterly basis.

Family Wealth Report has contacted EJF about the report to confirm. It may update this story in due course.