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From the Opalesque team:
The December edition of Hedgebay Global Hedge Fund Secondary Market Index said that the month saw prices on the secondary market fall to a new low as investors scrambled to start 2010 with a clean balance sheet.
Elias Tueta, co-founder of Hedgebay, believes that the fall was symptomatic of investors' continued desire to eliminate illiquid assets from their portfolios.
He said, "The vast majority of institutional investors in hedge funds have strict guidelines on the amounts allocated to countries, asset classes, investing styles, etc. As a result, when hedge funds began gating, suspending and side-pocketing assets investors' relative allocations to asset classes and styles changed quite dramatically. What was believed to be a liquid, short term investing strategy became long term private equity".
The lowest trade in December occurred at 56% of NAV, a jump of 93% from November's low 29%. While the majority of trades for the month occurred at an average of 80% of NAV, the highest trade was at 97% of NAV.
Although, the Global Secondary Market Index remained dispersed, some contraction in the gap between highest and lowest transaction prices from 68 points to 41 points was seen during December. This seems to contradict the two-tiered market theory.
The Hedgebay Global Hedge Fund Secondary Market Index in October showed the continuance of a wide dispersion between the highest and lowest prices at which secon...................... To view our full article Click here
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