Cebile: secondaries deal volume to fall in 2016

Sellers are reluctant to bring portfolios to market because they know pricing will be lower.

The volume traded on the secondaries market is expected to fall this year as public market unpredictability and macroeconomic conditions lead to widening bid/ask spreads for stakes, Secondaries Investorreports.

Respondents to Cebile Capital‘s Secondaries Outlook Report said they expect deal volume for secondaries to fall to a range between $37 billion and $40 billion due to volatility in the equity markets, the collapse in energy prices and the slowdown in the emerging markets.

“In a falling market, buyers are more careful [about paying] the top-most price they possibly can,” Sunaina Sinha, managing partner at Cebile, told Secondaries Investor. “They’re going to go towards conservative scenarios and will want a cushion because they don’t want to pay high pricing, par or premiums in a falling market.”

Read more by visiting http://www.secondariesinvestor.com.