Listed Hedge Funds
Listed Hedge Funds Continue to Struggle
Listed hedge funds have struggled in the last two years and the listed funds of hedge funds is in an even more dismal state, as a recent article in eFinancial News explains. Despite the listed hedge fund sector expanding from 14 to 60 from 2004 to 2008, funds are still trading at an average discount to net assets of 18 percent.
The other eight – from the RAB Capital Special Situations fund that floated on the London Stock Exchange’s Alternative Investment Market in May 2005 to the Brevan Howard BH Global fund that floated on the London Stock Exchange almost exactly three years later – all trade at a discount.
One of them, the MW Tops fund run by UK hedge fund manager Marshall Wace, was put into voluntary liquidation by its investors at the end of last month.
The listed fund of hedge funds sector has fared even worse. Having expanded from 14 funds to 60 between 2004 and 2008, with assets growing almost tenfold, the sector is now trading at an average discount to net assets of 18%, according to stockbrokers at Royal Bank of Scotland. The sector, in the jargon, is deeply underwater.
Investors, largely private clients, were attracted to listed hedge funds and funds of hedge funds in the mid-2000s through a combination of familiarity with investment trusts and desire to gain exposure to hedge funds. Source
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