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Benedicte Gravrand, Opalesque London:
There is a strange business going on among the wrecks that the Madoff funds have become, mused Swiss daily Le Temps earlier this week, and it involves auctioneers and waiting lists, and some of which is partly set in Geneva and organised by Hedgebay, the secondary market intermediary.
"About a year ago, a distressed funds specialist contacted us and asked if we had seen any Madoff funds for sale," Elias Tueta, head of Hedgebay, told Le Temps. He then sent a mailing to 6,000 contacts and was surprised by the response.
Since then, transactions have multiplied and now amount to around $50m - although most are still being negotiated, said Tueta.
Madoff funds, in this context, means the various feeder funds exclusively invested in Madoff, such as Fairfield Sentry, Kingsgate, etc.
When Hedgebay was created in 1999, it did not mean to deal with distressed funds, or with Madoff for that matter. Instead, it looked for access to hedge funds which were closed to new investors. Those wanting to access these exclusive funds were ready to pay premiums of up to 60% to convince existing investors to let go of their share.
Things changed with the credit crisis; Hedgebay's business then veered towards finding buyers on the secondary market for hedge funds in disarray, which were unable to meet redemption requests. Discount levels could reach 20%.
Companies betting on the ghosts of Madoff funds, said Le Temps in...................... To view our full article Click here
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