Hedge fund for sale on eBay

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500k Kensington broom cupboards usually signify the top of the housing market. Does the appearance of a hedge fund for sale on eBay say the same about the hedge fund market?

If you're interested in buying into the hedge fund world, bidding ends on the morning of Sunday 18 February. The fund in question is a Swiss-based 'fully authorised and operative' shell, without any assets. The seller is an elusive Italian who doesn't respond to questions, and the price is a hefty US$70k (36k). So far, there are no bids.

Is there any point to buying an asset-less hedge fund for a five-figure sum? Not really. Research by Absolute Return Magazine suggests fewer and fewer new funds are being formed as investors become increasingly choosy about who they put their money with. Buying a fund on eBay is unlikely to fill them with confidence.

The price also looks precipitously steep. Louise Gjertson, a director of hedge fund consultancy HedgeSupport, says she typically charges around 10k to set up a hedge fund. And if anyone were to buy the eBay fund (which seems unlikely), she says it would still be necessary to register it under new control.

"If you want to set up a hedge fund you'll need two very well-known investment managers, who have a very good track record and you can build the structure around that," she says.

In a market already frothed up by the multi-billion dollar payouts to the founders of US hedge fund Fortress, this looks like a distinct case of the structure coming first.

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