PRINCETON, N.J., July 12, 2006 (PRIMEZONE) -- Hedge fund investors -- particularly pension and endowment funds -- are demanding more transparency as hedge funds increase their private equity and venture capital holdings. Such investments present big hurdles to hedge funds, including treating investors fairly, getting paid for performance and living with ERISA. By enhancing transparency, Numeria helps hedge funds, and their investors, with all three.
Numeria is a revolutionary information (or prediction) market that values private firms and other illiquid corporate assets. Independent analysts from Numeria's global network each submit bids through a secure real-time market platform to quickly and objectively mark-to-market the value of the private or illiquid equity investments. Numeria operates like any market, enabling assets to be dynamically priced, but without actually selling them. Each valuation is Numeria Certified(sm), conveying to boards, investors, auditors, regulators and activists that it is reliable and bias-free. This enables a hedge fund to:
-- Treat its investors fairly when they invest in or redeem their
shares, because private equity, venture capital and other
illiquid equities are marked-to-market through dynamic pricing,
allowing the fund to report truer performance;
-- Realize the value appreciation in its private or illiquid
investments, even when a sale of the investments is not imminent,
because they are marked-to-market by an intermediary using a
market-based valuation approach;
-- Eliminate questions of objectivity, independence and accuracy in
the valuation of its private and illiquid equities, whether or
not the hedge fund is subject to ERISA (Employee Retirement
Income Security Act).
Many hedge funds report these investments at book value, showing their cost rather than what they are worth. While considered conservative, book value is misleading to investors as they review performance, or they enter or leave the fund, if market value is significantly higher or lower than book value. Other hedge funds report their private investments at market value, but rely on their own internal estimates -- on which transparency advocates frown -- or traditional third-party evaluations, which may be very inaccurate or have objectivity and independence problems of their own.
"Numeria really enhances hedge fund transparency so true performance shows. This helps hedge funds and investors alike," says Peter J. Leitner, founder and CEO of Numeria. "Investors want more and better information, and Numeria offers a cutting-edge way to get it quarter-to-quarter, month-to-month, or on whatever reporting basis is required."
About Numeria: Numeria Management LLC created the first marketplace for valuing private firms. Based in Princeton, N.J., with a global network of independent analysts, Numeria harnesses the forces of price discovery to provide the clearest view of corporate value. For additional information, see www.numeria.com.