09/06/2010
Institutional interest in the hedge fund secondary market increased dramatically between 2008 and 2009, with pension funds showing the most substantial change in activity, HFMWeek can exclusively reveal.
According to information obtained by request from leading secondary market provider Hedgebay Trading, pension funds, insurance companies, endowments and foundations accounted for 11.69% of the total trading volume in 2010, compared to just 1.42% in 2007.
Pension funds recorded the biggest upsurge in activity, rising 892% from the start of 2008 to the end of 2009.
“By their nature, the type of assets they manage and their necessary aversion to risk of any kind, they [pension funds] are extremely cautious, and that makes them very reliable barometers of
industry maturation,” said Elias Tueta, co-founder of Hedgebay. “The institutional activity we’ve seen is evidence that the secondary market is now a key feature of the asset
management landscape,” she added.
Trading by insurance companies also increased by 152% over the same period, while endowment activity on the platform rose 101%.
Increase text sizeIt’s interesting how one deal can often summarise the tenor of the times. Last week’s rubber stamping of the Man-GLG tie-up by the former’s shareholders may have been a formality, but in the wider context of the hedge fund sector, the tenets underpinning the move are far more interesting.
Collateral management is undoubtedly a big deal for the post-Lehman investor, but, as Danny Caplan, Deutsche Bank’s head of global prime finance sales, Europe, put it this week, “not all asset segregation is the same”.
"Firms must be careful not to take their eye off the ball, as enforcement action for reporting failures is increasing in frequency and severity"
As HFMWeek prepares to launch its new fresh look, this week’s Page 4 rolls out our industry confidence survey. Polling readers on their faith in the global economy, investor inflows and the impact of regulation we hope, on a weekly basis, to build a broad picture of the psychology of the hedge fund sector.
Read MoreHave your say on the hedge fund industry by taking part in two new HFMWeek surveys
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