Secondary trading: Will it take off now?

Fri May 1, 2009



Big names are getting into the business, which has been bedeviled by poor transparency, slow execution, counterparty risk - and resistance from managers.


Big names are getting into the business, which has been bedeviled by poor transparency, slow execution, counterparty risk - and resistance from managers

By Britt Erica Tunick

Could the secondary market in hedge fund investments finally take off? Although about ten years old, this market has maintained a back-room, dodgy reputation, in no large part because hedge fund managers have generally opposed it - and investors have been afraid to cross them. But with the power balance shifting, will managers quit resisting and let the market flourish? The introduction of a handful of new platforms for trading hedge fund investments seem to imply that may be the case.

Such big names as Morgan Stanley and Credit Suisse are getting into the action, hoping to capitalize on the desire of desperate sellers to unload - even if at a discount - the investments that they can't get out of since dozens of big...

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