London P.E. Investor Offers To Soak Up Hedge Fund Illiquidity

Jun 30 2009 | 2:12am ET

A player in the secondary market for private equity investments, Coller Capital knows all about illiquid investments. And with many a hedge fund desperate to offload theirs, the London-based firm smells an opportunity.

Coller has begun buying illiquid assets from hedge funds, Financial News reports. The firm, which boasts some US$8.5 billion in assets under management, has bought assets from two hedge funds, one in the U.S. and one in Europe, over the past year, and has had talks with about 50 others about similar deals over the past two years.

The deals are the firm’s first ever in the hedge fund space.

“Hedge funds may have other portions in their portfolios that can help them generate liquidity, but they are coming under pressure over the illiquid portions,” Coller principal Stephen Ziff told FN. “The exit market is slow, to say the least; often it’s nonexistent at the moment.”

That’s where Coller comes in. Ziff said the firm is in talks with many hedge funds eager to offload illiquid assets.

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