Fri, Apr 25, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedgebay: Secondary market trading volume reaches YTD high in March

Monday, April 26, 2010
Opalesque Industry Update - The volume of trading on the secondary market reached a year to date high in March, according to Hedgebay. The index has also shown repeats of last month’s premium trade, the first in nearly two years, confirming investors’ eagerness to seek out quality hedge fund assets.

The March edition of the Hedgebay Secondary Market Index (“SMI”) showed the highest number of trades completed so far in 2010. Hedgebay believes that the increased transaction frequency is indicative of investors having greater confidence in both the managers and future results.

Elias Tueta, co-Founder of Hedgebay, said:

“To some degree, the premium trade last month was a watershed for the secondary market. The emergence of trades at premium over NAV indicates that investors have become more comfortable with specific managers and with the market as a whole. Trust has returned to the market as far as quality liquid hedge fund assets are concerned, and we have seen the previous caginess around asset valuation disappear to an extent.”

Mr Tueta also attributed the higher volume to the continuous focus on portfolio clean-up. For this category of less liquid assets, the average price of completed trades dropped to 85% from 91% in February. Hedgebay believes that the higher volume shows a renewed determination among investors to clean their portfolios, in order to make the most of the burgeoning recovery of the hedge fund industry - which is most clearly demonstrated by strong asset flows in the primary market and the premium trading on the secondary:

“The premium trades, and those at close to NAV, are being closed by what we’d describe as the cash-raising investors on the secondary market. Many investors though are still focussed on getting rid of unwanted assets and starting again with a blank slate. In some cases in March we saw whole products, or even businesses being wound up on the secondary market. The volume of trades completed indicates that investors are especially determined to go forward with clean balance sheets, in order to take full advantage of the hedge fund market recovery. The process of an industry-wide clean up still has some way to go, but if the prevailing investor attitude of March continues, we may soon be at a stage when we can talk about investors tweaking their portfolios, rather than cleaning them” Corporate website: www.hedgebay.com

- FG

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Banner
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Rainwater and Blue Sky - an Australian water fund emerges[more]

    Bailey McCann, Opalesque New York: Financial reporters often tout new funds and investments as uncorrelated investments, but few can say they are uncorrelated to everything but weather. Enter Blue Sky Alternative's water fund which invests in the permanent rights to Australia's water. Sev

  2. Regulatory – Expect greater SEC scrutiny of hedge funds that share information or collaborate in advance of their trades, Alternative funds to get SEC test for leverage, liquidity[more]

    Expect greater SEC scrutiny of hedge funds that share information or collaborate in advance of their trades From Thelawyer.com: A recent Wall Street Journal article — ‘Activist investors often leak their plans to a favoured few’ — focused attention on ‘activist’ investors and stock analy

  3. …And Finally – This week's least competent criminal is Austrian[more]

    From ABCnews.go.com: A German sought by authorities for alleged fraud has been arrested in Austria — after dropping into a police station to ask officers whether he was under investigation. Police in Salzburg said the 59-year-old man walked into a police station in the city on Friday night. Sp

  4. Investing – Hedge funds find pitfalls along with profits in real estate ventures, Marcato Capital Management makes new bet on Dillard’s[more]

    Hedge funds find pitfalls along with profits in real estate ventures From Law360.com: Hedge funds have joined the rush to real estate deals and development in recent months to close the financing gap left by tightening bank standards, but attorneys say many aren't prepared for the disclo

  5. Agecroft Partners estimates 90% of hedge funds using social media[more]

    The use of social media has increased significantly within the hedge fund industry over the past couple of years. Social media is broadly used by investors as part of their due diligence process on hedge funds, by service providers in their sales efforts to hedge funds, and by hedge funds to enhance