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From Kirsten Bischoff, Opalesque New York:

Opalesque recently reported that hedge fund managers were not exiting underwater hedge funds in the large numbers that they were previously expected to. (Source) As hedge funds continued their positive performance through August 2009 high water marks draw closer on the horizon, and are driving the opportunity secondary market provider www.2n20.com announced on Wednesday.

High Water Mark Market (HWM Market), which 2n20.com has launched sells fund shares at their net asset value (NAV). NAV is the set purchase price because investors with stakes in these funds are not in lock-up or distressed situations and could theoretically cash out their investment with a redemption notice to the fund manager.

The enticement of those funds bought and sold on the HWM Market lies in their NAV being below the high water mark and their fund and strategy performance in making gains on the way back to that high-water mark.

Splitting the difference As an enticement to both investors with fund shares to offload and to investors looking to squeeze out any and every additional possible performance gain (including not paying performance fees on those gains) the market also includes a Scale of Fees and Charges wh......................

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