18/08/2010 Author: Elana Margulies

Buyers bid for Ospraie fund's discount assets

Almost two years after Ospraie Management told investors it was shutting the doors on its main hedge fund, investors finally look set to reclaim their outstanding capital.

Buyers have bid to scoop up the remaining funds’ assets at 70% of its 30 June net asset value (Nav), according to an investor letter from Credit Suisse, which is handling the transaction.

Richard Heller, partner in the investment management subgroup at Thompson Hine, said a reason the majority of buyers of Ospraie’s assets wanted to pay less than 70% of the funds’ Nav was because they were likely to be less marketable securities.

“It would depend largely on the buyers' belief that these will eventually have value but it is reasonable for them to be purchasing them at a discount because they are likely Level 3 securities,” he said.

Ospraie’s remaining assets are in the illiquid investments, the majority of which are owned by the Ospraie Special Opportunities Fund, a private equity vehicle.