While many pundits are predicting that hedge funds are the next mutual fund, they may want to remember there are differences. One major difference being the mutual fund industry's track record for liquidity.

The latest example of hedge funds falling down in this regard was provided on Friday by PlusFunds Group, a venture-backed hedge fund firm that once boasted of top executives from the mutual fund industry on its payroll.

PlusFunds officials said last week that they were freezing its Standard & Poor's Managed Futures Index Fund and would not honor redemption requests from the fund. The move was made after a bankruptcy court ruled for unsecured creditors of Refco Inc. who sought to block a $312 million asset transfer from Refco to Lehman Brothers Inc. that was made prior to Refco's October 17 bankruptcy filing.

That is not all that is going on at PlusFunds, though. The hedge fund also revealed that CEO Paul Aaronson is stepping down December 31, after just eight months on the job. He will be replaced by Timothy Parrott, who joined PlusFunds in June.

Aaronson is not the only top executive leaving. Also on the way out is general counsel Patrick McMahon and chief financial Christopher Aliprandi.  

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