PE Key Trends Blog

Secondaries “go big”, but what about the forgotten middle?

Aug 29, 2019 1:16:54 PM / by palico posted in secondaries

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Secondaries “go big”, but what about the forgotten middle_article image

Secondaries fund managers are in an arms race. For the last few years, Ardian and Lexington Partners have been vying for the top spot, raising successively record-breaking vehicles to snatch up every pre-owned PE fund stake in sight. However, they’re not the only ones amassing hefty arsenals. Nine of the ten largest firms in the market at the beginning of 2019 had raised the targets on their latest flagship funds by an average of 75%, PEI data show, in a case of “go big or go home”.

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GP-Led Best Practices:  The right way to approach this growing sector of secondary transactions

Aug 1, 2019 5:00:18 PM / by palico posted in secondaries

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gp-led best practices image

 

Proactive communication, transparency, and fair timelines are essential to preserving investor relationships

GP-led secondaries hit a record $22bn in 2018, a 38% increase on the previous 12 months and triple the levels seen a year earlier. The momentum has continued into 2019 with H1-2019 doubling the figures from H1-2018.

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When the Denominator Effect Comes Calling

Jul 19, 2019 1:52:43 PM / by palico posted in secondaries

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Denominator effect article image

Few talk about the denominator effect these days, but they soon will. For those with short memories, the phenomenon refers to the relative weighting to private equity (the numerator) in an investor’s portfolio growing by virtue of a fall in the public markets (the denominator). This skews target allocations, forcing LPs to rebalance their portfolios by selling fund positions in the secondary market.

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Secondary Pricing Report H1 2019 - Funds Selling at Par in a Market Poised for Record Volume

Jul 11, 2019 11:07:33 AM / by palico posted in Private Equity KeyTrends, secondaries

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Secondary Pricing report H1 2019

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Fasten your seat belts ladies and gentlemen - LPs turn to the secondary market in preparation for a hard landing

Jun 28, 2019 2:07:23 PM / by palico posted in secondaries

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It’s time to adopt the brace position. Tough times are on the way. There are few who doubt we are now teetering on the brink of an economic downturn after one of the longest bull-runs in history. 

Just under two-thirds of LPs in Preqin’s H1 2019 Alternative Asset Investor Outlook think we have reached the peak of the market.

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What’s Behind the Exceptionally Tight Pricing and Stability of PE Funds Sold on the Secondary Market

Apr 9, 2013 4:12:37 PM / by Robert Ientile posted in Palico, private equity, Private Equity Market, secondaries, secondary, V2

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Despite the ebbs and flows of the world’s public equity markets, secondary pricing for private equity funds has remained remarkably stable over the past two years, with the average discount to net asset value of top bids hovering near the 10 percent mark since mid-2010.

Today there is every reason to believe that secondary pricing is more insulated than it has been in the past from public market swings. There is also plenty of reason to believe that secondary pricing versus net asset value will narrow further for all but end-of-life secondary directs.

The average discount today in the secondary market for PE funds is around 9 percent, but more than 60 percent of funds are trading at discounts of less than that, with many selling at par or even at small premiums, according to Palico estimations.

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