28/04/2010 Author: Gwyn Roberts

Second-hand market hits high-point in March

Investor interest in ‘second hand’ hedge fund stakes reached new peaks in March, with higher trading volumes and a second consecutive month of deals completing at a premium, according to secondary market platform, Hedgebay.

Although the increased trading activity represents greater investor confidence, at 85.04, the index dropped by almost 650bps from February, despite a number of deals closing slightly above funds’ actual values.

Hedgebay founder, Elias Tueta, attributed March’s busy period and the general drop in prices to a renewed focus on clearing illiquid strategies from portfolios, as average prices dropped from 85% to 91% of Nav.

In spite of a number of premium trades, “many investors are still focused on getting rid of unwanted assets and starting again. In some cases in March, we saw whole products or even businesses being wound up on the secondary market,” said Tueta.