Secondary Private Equity Transaction Volumes to Increase Substantially in the 2H2021
August 11, 2021
Secondary Private Equity Transaction Volumes To Rise As COVID Hampers MarketsNYPPEX projects that secondary private equity transaction volumes will increase substantially in the 2nd half of 2021 in both alternative investment funds and private companies, as COVID-19 variants’ Delta, Eta, Iota, Kappa and Lambda adversely affect stock market returns.
LP Interest Sales Will Rebound Across The Board With Private Equity LiquidityWe expect LP interest sales to rebound, both singles and portfolios, from relatively low volumes in 2020 and the 1H2021 compared to GP-led deals, especially if bid prices increase from secondary buyers with significant dry powder.
Weak IPO & Stock Market Set To Power Strong Secondary GP-Led SalesGP-led secondary sales will continue to be strong as exits will be sought in a weaker IPO and stock market.
Secondary Bid Prices Do Not Currently Reflect Their Historic PerformanceWe believe secondary bid prices have been muted in the 1H2021 and do not reflect the historical performance of many alternative investment funds, particularly venture strategies.
Private Equity Liquidity Will Power Next Wave Of Gains Despite General UncertaintyThis sentiment has been driven by secondary buyers that remain cautious about the effects of COVID-19 variants on certain industries, marked-up NAVs, fully valued stock market conditions, and most recently, concerns about inflation and higher interest rates ahead.
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Disclaimer Note: Information estimated by NYPPEX. Actual results may differ.
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