Secondary Buyers Blew It Last Year: Prices Rise in 2010
Secondary market prices for private equity funds are on the rise, according to a report being released tomorrow by Cogent Partners. The data looks at transactions from the first half of 2010, and finds that average high bids rose to 79.6% of NAV from 72% of NAV during the second half of 2009. Buyout funds were particularly hot, increasing to 86.4% from 68.9 percent. All of this leads me back to an argument I began making nearly a year ago: Secondary buyers blew it in 2009. They had a record amount of dry powder, but were paralyzed by fears that new deals would be like trying to catch a falling knife. "The sellers will cave," secondary buyers thought, "particularly as their liquidity squeeze tightens."
28 July 2010•2 mins read
