Shelley Capital and the Hedge Fund Secondary Market

Posted: 8 Mar 2012

See all articles by Luis M. Viceira

Luis M. Viceira

Harvard Business School - Finance Unit; National Bureau of Economic Research (NBER)

Elena Corsi

Harvard Business School, Europe Research Center

Ruth Dittrich

Harvard Business School

Date Written: June 28, 2011

Abstract

An advisory company has to decide how to sell their client's hedge fund holdings in the secondary market, and thinks about their future. Shelley Capital was a a European advisory company operating in the hedge fund secondary market, a market that boosted in 2008 with the world financial crisis. Shelley had identified four final bidders for the $84.5 million portfolio of illiquid hedge fund holdings that one of their clients had commissioned them to sell and had now to decide to whom they should sell the holdings, if they should split up the portfolio, or if they should postpone the sale. At the same time, they needed to decide about their future business. The financial crisis was behind the exceptional growth of the hedge funds' secondary market, yet another crisis could follow and boost the secondary market again. What direction should Shelley take once the hedge fund industry fully recovered? But what if a second global crisis threw the hedge fund industry into disarray once again?

Learning Objective: Hedge fund secondary market, side pockets, agency theory, brokerage model.

Suggested Citation

Viceira, Luis M. and Corsi, Elena and Dittrich, Ruth, Shelley Capital and the Hedge Fund Secondary Market (June 28, 2011). Harvard Business School Finance Case No. 211-112. Available at SSRN: https://ssrn.com/abstract=2018407

Luis M. Viceira (Contact Author)

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States
617-495-6331 (Phone)
617-496-6592 (Fax)

HOME PAGE: http://www.people.hbs.edu/lviceira

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Elena Corsi

Harvard Business School, Europe Research Center ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Ruth Dittrich

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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