New York (HedgeCo.net) – The secondary market has seen the return of stability at the start of 2011, with February showing an increase in the average trade price for the second consecutive month, according to hedge fund market data provider, Hedgebay. The rise to 73.15%, although slight, suggested the market is establishing a more consistent average.

More encouraging still, according to Hedgebay, was the appearance of a trade at 103%, the first premium trade since April last year. The premium trade, for a diversified commodity fund, could point to a return in pre-crisis confidence among investors. The rise in equity markets, following solid performance last year, may see investors once again paying premium prices for access to high quality hedge funds.

“The market is currently in a stasis between crisis and recovery, with trading being dictated by both the legacy effects of the downturn and increased investor confidence. “Elias Tueta, co-founder of Hedgebay said, “Improved conditions mean that most sellers have no immediate obligation to sell, and currently buyers are unwilling to match their prices.”

“This is a temporary holding pattern on the market, and is a sign that we are closer to the highs of pre-crisis trading than we are to the illiquid state of the post crisis market. Once buyers have the confidence to match sellers’ prices, we will see consistently higher average prices, and the kind of premium trade we have seen this month will become more common. The 103% trade is, we hope, a sign of things to come. Certainly, we expect 2011 to be a significant year for the hedge fund market.”

Editing by Alex Akesson

For HedgeCo.net
alex@hedgeco.net
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