Tuesday, 30 September 2014
Last updated 2 hours ago
Feb 14 2011 | 12:49pm ET
Competition in the secondary market for claims against fraudster Bernard Madoff is driving up prices, says one of the UK’s biggest hedge fund market makers.
"We've had these positions on our books for two years, and two years ago you couldn't get a price,” Neil Campbell, head of alternative investments at brokerage Tullett Prebon told Reuters. “Up to six months ago it's been one or two cents in the dollar, as optionality, but now it's become more serious because there's more competition.”
In the past six months, the price of holdings in Madoff feeder funds like Fairfield Sentry and Kingate has risen to 7 or 8 cents on the dollar from 1 or 2 cents, says the news agency. Buying bankruptcy claims from a direct investor with Madoff can cost 30 or 40 cents.
The market has been encouraged by the successor of Irving Picard, trustee for the Madoff bankruptcy, who has recovered about $10 billion for victims of Madoff's Ponzi scheme.
According to Campbell, distressed hedge funds, distressed desks at banks and funds of funds specializing in the secondary market are all entering the sector. And on the other side, many funds of funds are trying to dump Madoff holdings to limit damage to their reputations.
"There are a lot of vehicles globally looking at this opportunity," said Campbell. "A variety of buyers are coming in, due to the success of the trustee, who has been fairly ferocious in getting results, and the (small) amount of claims made, especially in Europe, which has created a very interesting window of opportunity."
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
The trading world is inundated with strategies and techniques. Here’s one way traders can get a handle on information overload.