October 20, 2017

Secondary Prices for 25 Private Equity Funds

Private equity commentary and data from Palico – The Private Equity Fund Marketplace


A Palico survey of limited partners who’ve successfully purchased stakes in private equity funds on the secondary market over the last six months indicates the current sweet spot for premium pricing (in relation to net asset value) is for vehicles that began investing in 2011. That vintage accounts for five of 13 funds priced at par or better.


Transactions at Close to Par

The average pricing for the 25 transactions tracked by Palico stands at 98 percent of the most recently reported net asset value, with funds sold at par or better generating an average premium of 4.7 percent. For funds sold at less than par, transacted value averages 90.8 percent of NAV.

Average Age on the Secondary Market is Some Seven Years

For the completed secondary transactions tracked by Palico, the average fund age is 7.4 years. The oldest funds, venture capital-focused Oak Investment Partners XI and tech investor Technology Crossover Ventures V, finished fundraising in 2004. The newest fund, itself a specialist secondary buyer, Lexington Capital Partners VIII, closed fundraising only two years ago.

The Appeal of Selling and Buying Secondaries Online

Apart from specialists who have the requisite resources and connections, secondary selling and buying is difficult to do efficiently without the benefit of an online marketplace like Palico. On Palico, information from sellers is anonymously transmitted to buyers who’ve already expressed an interest in the fund or funds via wishlists. After receiving bids, sellers only reveal their identity to potential buyers if they choose to do so. For secondary buyers, Palico offers hard-to-find dealflow in just a few clicks.

Making the Private Equity Commitment Process Efficient

Out of the hundreds of meetings taken annually by investors, managers, and their advisors, the vast majority are dead ends. By bringing investable fundraisings, secondaries and co-investments to desktops and smart devices, Palico gives limited partners, general partners and their advisors more time to discover, analyze and invest in the best opportunities. LPs and GPs from across the world are closing deals more cheaply and efficiently using Palico’s digital marketplace.

“With Palico, we stay on top of investment opportunities across the globe and across specialties.”

Gonzalo Eguiagaray, Arcano Group