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Archive for the ‘Pension funds’ Category

30/09/11

Pricing Risk for Hedge Fund Illiquid Assets

At Shelley capital, we take the view that the current debt crisis and economic slowdown could make the pricing of illiquid hedge funds assets more difficult and lead to delayed/reduced cash flow realisations. Against this uncertain climate, clients might consider transacting on the secondary market of hedge funds while they can.

Some forced selling might be on the cards in order to secure cash in hands now and not risk uncertain price realisations in three or four year’s time. A prolonged period of turbulence would negatively impact the pricing of illiquid hedge fund assets for a number of reasons:

  1. Cash-flow expectations may be significantly reduced, resulting in lower IRRs for buyers at current prices.
  2. An uncertain macro backdrop would exacerbate the inherent difficulty of valuing hedge-fund secondaries.  Additional provisioning at fund levels might therefore crop up.
  3. All classes of hedge-fund illiquids will be affected.  The PE features of most side pockets, for instance, make them directly correlated to the corporate sector, while ABL funds would suffer similarly from deteriorating credit conditions.

Please see our latest publications on www.shelley-capital.com/publications.html

07/04/11

A bumper 2011 for the secondary market

A bumper 2011 for the secondary market. This is the prediction of leading research firm Preqin published in their March special report entitled “Secondary Market Outlook”. Whilst the report focuses predominantly on PE investments, Shelley capital believes that most of the trends apply to the secondary market of hedge funds as well. Read on

20/01/11

GAIM USA Conference

On 20th January 2011, Pascale Alvanitakis-Guely, co-founder of Shelley Capital, addressed an audience of hedge fund investors, managers and industry experts at the prestigious GAIM USA conference in Boca Raton, as a speaker on the secondary market panel. The discussion shed light on the opportunity for secondary market participants and the current trends in supply and demand. For more information please follow the link: www.iirusa.com/gaimusa

Read on