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Dead-Man’s Switch
Inevitably there will be cases in which a fund manager is unexpectedly and suddenly unable to manage a fund. Given the nature of these funds, most investors will be unaware of the manager’s departure. If one were paying attention to the specific enzyme fund, one would notice an absence of trading, however, that could be understood as confidence by the manager in the current positions. One might observe a decline in the quality of performance (or perhaps an improvement ), however, one would not know that the manager was gone. Such vaults could continue indefinitely, accruing fees that will never be accessed. I may be exaggerating the extent of such, however, the loss of a manager would be difficult for investors to determine and is obviously problematic. A suggestion as to how to deal with this: Enzyme establishes a default time-period (whether that be 365 days, 180 days, 90 days, 30 days, or ??), which can be modified by the manager, during which the manager is required to sign-in to the fund account, at which point the count-down would begin again. Managers (should) know their personalities and trading/investment strategy well enough to be able to say that if signing-in has not occurred within some set period of time that something is clearly amiss. If the manager fails to sign-in, then the assets are automatically converted to a predetermined more-neutral asset such as the denomination asset, and a statement is placed on the fund/vault website stating what has been done.
under review
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