Study of secondary hedge fund market finds investors paying up for access

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In the first study of its kind, Tarun Ramadorai, a visiting lecturer in finance at Oxford University’s Saïd Business School, analyzed 10 years of Hedgebay Trading Co. data to show that investors who buy and sell hedge fund shares tended to pay up to get into closed funds while discounting the shares of hedge funds requiring long redemption notices.

Founded in 1999, Hedgebay connects buyers and sellers of hedge fund stakes. Ramadorai analyzed 935 trades in 220 different hedge funds that were transacted between August 31, 1998 and July 30, 2007.

The study confirms common sense about which hedge