Do private equity firms lack an eye for a bargain?

In this issue of PEI, we take a close look at developments in the secondaries market (see page 39). One market source questioned why private equity buyers are seemingly not like high street consumers in their attitude to cutprice stock:

“I have a hard time explaining why there was so much activity in the secondaries market in 07-08 when it was a premium price environment. You had sophisticated buyers and mixed sellers – some sophisticated, some not. And people were paying premia for large buyout assets. Then they're on sale at a 50 percent discount and no-one's willing to buy. Why will no-one buy at a 50 percent discount? What makes our market different from Harrods? People would buy at a 50 percent discount in Harrods.”