P.E. Secondaries Set For Biggest-Ever Year

Apr 24 2014 | 2:25pm ET

The secondary private-equity market is set to hit an all-time high this year.

Volume in secondary deals, in which investments in private-equity funds change hands, will hit a record this year, The Wall Street Journal reports. Rising stock markets and concomitant appreciation of p.e. holdings have some investors wanting an early exit, and others clamoring for a piece of the growing pie.

Deal volume is likely to exceed $30 billion this year, according to top industry players, up from between $23 billion and $27.5 billion. And the growing demand has pushed discounts to net asset value in such deals down precipitously.

Discounts offered on the secondaries market fell to about 7% at the end of last year. During the financial crisis, the discount was often as high as 35%.

Secondary investments will be the major part of Ardian’s sixth fund; US$9 billion of the US$10 billion raised is dedicated to the area.


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