Secondary market trading is booming despite resistance from
Trading of hedge funds in the secondary market is
flourishing and is showing every sign of increasing as managers
handcuff investors with increasingly long lock-ups. On one day
in September, blocks of shares in 150 funds were on the auction
block at www.Hedgebay.com. The greatest demand was for
especially well-regarded long/short and global macro names.
On the other side of the equation, investors were seeking to
sell $43 million of shares from a single convertible arbitrage
fund, more than those of any other money manager on the site.
Interestingly, there was as much money ($10 million) chasing
shares in a leading multi-strategy fund as there were shares in
the fund that were up for sale.
No one knows exactly how many hedge fund shares trade on the
secondary market. Hedgebay, which is believed by investors to