New York (HedgeCo.net) – Prices on the hedge fund secondary market remain volatile, according to the latest data from Hedgebay, a hedge fund market data provider.
October’s high of 81% was the third time in a row the index had risen, suggesting that consistency might slowly be returning to the market after a turbulent year. However, the average trade price dropped to 74% in November, casting doubt over the theory, with the volatility now expected to extend into 2011.
“There is something approaching fatigue in the illiquid end of the secondary market, as investors try to start anew in 2011.” Elias Tueta, co-founder of Hedgebay said, “A clean portfolio free from illiquid assets will allow investors a clean bill of health going into the first quarter of next year, and free up capital for some of the funds that have shown good performance this year. This pattern of trading will likely continue throughout December.”
Tueta has also pointed to the recent governmental interventions at several large hedge funds as a reason for November’s drop. The interventions have made investors anxious that their managers, or managers on offer on the secondary market, could face the same treatment.
Meanwhile, Hedgebay’s Illiquid Asset Index which measures trading in gated or suspended funds rose quite significantly to 44.09%.
Editing by Alex Akesson
For HedgeCo.net
alex@hedgeco.net
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