Secondary Market Continues Advance As Investors Shy Away From Illiquid Funds

Nov 16 2010 | 12:50pm ET

The hedge fund secondary market continued its turnaround in October, a month that saw the highest average trade price in six months.

Buyers paid 81% of net asset value for hedge fund stakes last month, according to the Hedgebay Global Hedge Fund Secondary Market Index, the second time in as many months that the average price has gone up. In September, investors paid just under 79%, on average.

"It is extremely difficult for investors to be secure about committing to trades when price valuation is so volatile, as it has been over the last six months," Hedgebay co-founder Elias Tueta said. "The steady rises over the last couple of months may bring a bit of added confidence to investors for the rest of the year."

But confidence in one area was considerably shaken last month: the illiquid hedge fund space. The Hedgebay Illiquid Asset Index plummeted to 34.5% in October from 47.6% in September.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...