Cash-strapped investors have put more than $540m (€420m) of private equity and hedge fund stakes up for sale on a new platform launched Tuesday, aiming to draw out possible buyers for the otherwise illiquid holdings.

The platform introduced by newcomers SecondMarket is a bold move to break the log-jam in markets for second-hand private equity and hedge fund stakes, where prices have plunged to record lows as sellers have far outweighed buyers.

Hundreds of pension funds, endowments, banks, insurance companies, and wealthy individuals are looking to sell their private equity and hedge fund holdings to cover losses elsewhere in their investment portfolios.

SecondMarket, which describes itself as the world’s largest marketplace for illiquid assets, said its trading platform would trade limited partnership (LP) interests in private equity, venture capital, hedge funds, and funds of funds.

The move was greeted with scepticism by specialist secondary investors, who said the idea had been tried before and failed because of the need for strict confidentiality in selling LP interests and the heavy restrictions placed on selling the assets.

However, Barry Silbert, chief executive of SecondMarket, said that, since it started advertising plans to launch the new platform last month, more than $500m of LP interests had been listed for sale on the website. He said $40m of new LP interests were put up for sale only Tuesday. More than 150 of SecondMarket’s 2,000 pre-qualified participants have registered their interest in bidding for some of the LP interests.

“There is billions of dollars of this stuff coming up for sale,” said Mr Silbert. “But it is a bit of a Wild West at the moment in the way it gets sold. We aim to formalise it.”

More than $130bn of private equity interests are expected to be put up for sale in the next two years, according to the specialist secondary investor Paul Capital. But there is only about $30bn of capacity among specialist secondary buyers. Because of the supply-demand imbalance, sellers of private equity assets have been receiving less than 50 cents in the dollar of the face value of their assets, according to a recent report from Cogent Partners, a secondary markets adviser.

SecondMarket has already traded more than $1bn of assets since its launch in 2005, including restricted and illiquid blocks of public equities, auction rate securities, and bankruptcy claims, such as those pending against Lehman Brothers.