Secondary Hedge Fund LP Market Turns Negative

HedgeBay reports that after a four-fold increase in hedge fund LP volume, prices of LP interests are starting to fall: the June average price was 90.13, a 2% decline from May. Yet, liquidity is likely negligible and bid ask spreads on HedgeBay are notoriously wide. Yet, HB's summary assesment of the HF LP market is surprisingly astute and could be applied to the broader, much more busted market: "As a result, clients who are not necessarily “in need” of cash are making a present value calculation based on the inherent risks – including market, manager and business – as well as the probability of recovery for any particular asset. Armed with this information they are able to make rational rather than emotional decisions about trading out."