ANALYSIS-Hedge funds haunted by Asia pre-IPO deals

HONG KONG, Oct 10 (Reuters) - Before the Chinese initial public offering boom began to fizzle late last year, hedge funds jumped to buy stakes in hot companies before they went public, an investment known as pre-IPO financing. What seemed like a good idea at the time is about to come back and haunt them. With Asian capital markets all but shut, forcing billions of dollars worth of IPOs to be shelved, many hedge funds are sitting on illiquid and often hard-to-price pre-IPO investments that in some cases could end up worthless. The problem might not be as severe if markets were still rising or at least steady. But the financial market bloodbath of recent weeks has made a miserable situation dire for many Asia hedge funds, one of the world's worst performers even before the latest surge in volatility. 'You can hold at cost, but... [read full story]