Tullett Prebon Alternative Investments (TPAI) has developed and launched a screen-based matching engine called TP-AIME (Tullett Prebon Alternative Investments Matching Engine) to better facilitate transactions in alternative investments.
In addition to functioning as a price discovery and matching engine, the screen also facilitates auctions in hedge fund, private equity and real estate fund interests.
Secondary transactions in fund interests tend to be opaque. However, TPAI believes technological innovation will, in time, lead to a more robust marketplace. With thatgoal in mind, TP-AIME has been developed to increase transparency, simplify the arranging of transactions and make trade-settlement more efficient.
TP-AIME facilitates on-going transactions as well as organized auction processes. It is aimed at limited partners ('LPs') looking to buy or sell illiquid interests. Additionally, general partners ('GPs') can employ it as a tool for one-time managed liquidity events aimed at investors that remain in tail-end funds, as well as offering their investors a periodic source of liquidity from ongoing funds.
The ingenuity of the screen is that it carries both live and indicative pricing which has been combined with TPAI's existing auction infrastructure and is delivered via TPAI desks in London, New York, Hong Kong and Dubai. This has brought speed and efficiency to both price discovery and settlement stages of secondary trading, which have historically proven cumbersome and administratively onerous for LPs and GPs.
Suchita Nayar, Head of Alternative Investments North America at Tullett Prebon, says: “All markets have to develop if they are to thrive. TPAI’s new system has been a long time in development, but the clarity and integrity it brings to secondary transactions is another milestone in the evolution of the alternatives market. The screen offers increased transparency to LPs and GPs across the globe which is vital for international auctions with multiple participants.
“We are pleased that numerous GPs have already signed up to run auction events, or to offercontinuous liquidity to their clients via the screen. We are getting closer to a time when investors will be able to choose between regular liquidity events several times a year, or will be able to access immediate liquidity.”