NYPPEX: Prepare Now for 2020 Year End Financial Statements by Completing Secondary Private Equity Interest Transfers
October 1, 2020
Below are secondary market trends in private equity funds.
- In the institutional LP channel, secondary bid indications were approximately 75.25 (% of NAV) or 15% lower compared to 86.25 as of December 31, 2019 for $10-25 million transaction sizes of interests in private equity funds.
- In the private wealth LP channel, secondary bid indications are approximately 72.50 on average (% of NAV) or 12% lower compared to 81.20 on average as of December 31, 2019 for sub $5 million transaction sizes of interests in private equity fund of funds.
- Fund of funds with significant exposure to the retail, travel or leisure industries are bid at 68.75 and lower on average in the private wealth channel.
- Depth of liquidity and probability of execution remained strong at NYPPEX as we executed 25 of 27 managed auctions for a 92% success rate through August 31, 2020. The 2 unsuccessful auctions were due to seller’s unreasonably high
- Called percentages have varied significantly from 15% to 90% in 2020 for secondary interests in funds in both the institutional LP and private wealth LP channels.
- GP’s tax compliance remains highly disciplined as the NYPPEX Qualified Matching Service under IRS Regulation 1.7704 was utilized on approximately 67% of our managed auctions year to date in 2020.
- The time period from launch to settlement date for non-QMS secondary private transfers at NYPPEX remained steady in 2020 at approximately 44 days, despite COVID-19 work from home policies.
- GPs and LPs with secondary interest transfers to settle by year-end are welcome to arrange a confidential phone call by contacting Kelly Londono at email@example.com or by phone below.
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NYPPEX Private Markets
Information as estimated by NYPPEX. Actual results may differ. This market commentary is for informational purposes and qualified clients only. It is not a solicitation of a private transaction which may only be done through documents created by the private fund or private company and only in jurisdictions where permissible. Private placements may contain a high degree of risk.
Copyright 2020. NYPPEX Holdings, LLC. All rights reserved. www.nyppex.com
About NYPPEX Private Markets
- NYPPEX is one of the world’s leading secondary private equity transfer administrators worldwide. Our specialized professionals and the NYPPEX QMS Platform™ provide clients the opportunity for superior transaction speed and price execution, at low cost
- We have provided access to deep liquidity from established client relationships located in over 26 countries. Our clients include alternative investment firms, private companies, pension funds, financial institutions, endowments, foundations, family offices and their respective advisors worldwide.
- Since 2004, the NYPPEX QMS™ has been formerly recognized by the U.S. Internal Revenue Service (through private letter ruling PLR-111165-04) as a Qualified Matching Service for private partnerships under Internal Revenue Code §1.7704. Securities privately offered through NYPPEX, LLC in jurisdictions were permitted. NYPPEX is regulated in the U.S. by the SEC and FINRA. Member SIPC. www.nyppex.com.
This email is for informational purposes only and only for the addressee specified, which we understand to be a Qualified Purchaser and holder of private equity fund assets. It does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security which may only be done through an issuer’s offering documents and in jurisdictions where permissible. Nothing contained in this email or subsequent document constitutes investment advice or offers any opinion with respect to the suitability of any security. The views expressed on this email and subsequent documents should not be taken as advice to buy, sell or hold any security. In preparing the information contained in this invitation, we have not taken into account the investment needs, objectives and financial circumstances of any particular investor. This information has no regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this information and investments discussed may not be suitable for all investors. Any views expressed on this invitation or subsequent report by NYPPEX were prepared based upon the information available to NYPPEX at the time such views were written. Changed or additional information could cause such views to change. All information is subject to possible correction. Information may quickly become unreliable for various reasons, including changes in market conditions or economic circumstances