Secondary hedge fund market trades at all-time low

Date: Monday, February 1, 2010
Author: Joanne Harris, HedgeFunds Review

Hedgebay’s secondary market trading index set a new low during December 2009, with the average price of trades dropping below 80% of net asset value (NAV).

Although the dispersion between the highest and lowest trades narrowed to 41 points, the average price was the lowest in the 11-year history of the secondary market.

Just one trade took place close to NAV, at 97%. The lowest trade during December was at 56% of NAV.

Hedgebay co-founder Elias Tueta said the fall could be attributed to investors' continued desire to eliminate illiquid assets from their portfolios.

The top-traded strategies during December were credit and private equity.

The index, launched in September 2009, provides hedge fund investors with statistics on aspects of the secondary market, including the average discount or premium to NAV of hedge fund shares traded during the month.