PE Key Trends Blog

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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