Hedging hedge funds
|Bermuda: home to hedge-funds|
If only LTCM had been quoted on the Bermuda Stock Exchange, UBS could have shorted the stock and properly hedged its $800 million long position. Well, here, only a couple of years late, is the answer to Mathis Cabiallavetta's nightmare.
Plusfunds.com is inviting hedge funds to list themselves for electronic trading on the Bermuda exchange. But there's a catch. The hedge fund manager has to mark himself to market each day. And he has to say how much of the portfolio consists of illiquid assets - such as a dam project in India - whose price can't be determined daily. "The hedge funds have to agree to set up a new fund on the platform," says Chris Sugrue, chief executive of Plusfunds.com. "They have to commit to give us all their transactions. And the shares of the hedge fund must be fully transferable."