Monday, May 11, 2009

Hedge Fund LP Secondary Market Interest Update

Secondary market hedge fund interests continue to be actively traded, and as LP broker Hedge Bay indicates, the discounts for offers have hit unprecedented levels. The most recent level of Hedge Bay's Secondary Market Index Value hit an all time low of 80.31 for the month of March.

In terms of specific bids and asks, presented below are the most notable blocks for sale over the past 10 days:

Quantek Opportunity Fund: $15.0 million
Diamondback Offshore Fund: $10.0 million
Brevet Capital Special Opps: $10.7 million
New Stream Capital Fund: $8.2 million
Global Secured Capital Fund: $6.5 million
Whitecap Offshore: $5.0 million
Hound Partners: $2.0 million
Contrarian Capital Finance: $1.9 million

On the bidside, there have been quite a few interested buyers as well, the most notable of which are the following brand name hedge funds:

Basso Investors: $10.0 million
GoldenTree Offshore: $10.0 million
Millennium: $8.0 million
Third Eye: $19 million (offset by $12.5 million for sale)
Ore Hill: $5.0 million
Paulson Advantage: $5.0 million
King Street Capital: $5.0 million
Pershing Square: $5.0 million
Jana Partners: $5.0 million
One East Partners: $1.8 million

Ultimately, whether a transaction occurs depends on whether the buyer and seller are willing and able to agree on a final transaction price. It is likely that the bid/ask spreads in this highly illiquid market would be wide enough to prevent all but the most determined sellers and buyers. Sphere: Related Content
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