30/09/2010 Author: Shannon Hawthorne

Secondary market trading volume peaks in August

Secondary hedge fund market provider Hedgebay registered its highest volume of trading for the year in August as investors took advantage of the holiday season to focus on portfolio construction via secondary trading. 

Most of the trading took place within gated and suspended funds, indicating that portfolio clean-up remains high on the list investors’ of priorities. 

“With much of the trading taking place in gated and suspended funds, investors are currently focussed on making sure their portfolios are set for when markets resume in earnest,” said Elias Tueta, co-founder of Hedgebay.  

However, despite this, the average price for trades on the firm’s Secondary Market Index, fell to 74%, its third consecutive monthly decline. Trading in its Illiquid Asset Index also fell over 23 points to 44%, a strong indication that investors in illiquid assets remain wary of market conditions. 

“It is not certain at this stage whether trading patterns in these illiquid assets are being driven by investors’ fears or by other random market factors such as distribution,” said Tueta. “It will be interesting to see how this section of investors reacts to the next set of market developments, especially if the hedge fund market dips again.”