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Last year, investors disembarked the record amount of private shareholders in used markets, as the long -term drought has encouraged pension funds and buying groups to look for other ways to cash in their investment.
Global trading scope has reached $ 162 billion on the so -called secondary market, where investors in Private Equity or other private funds are selling their share of cash for cash or fund managers for sale of companies with new funds.
In total, this increase of 45 percent compared to the previous year and more than 20 percent more than the previous peak in 2021, according to the analysis of the Jefferies investment bank.
Secondary jobs have been flourishing in recent years because private capital companies have struggled with exit from investment via IPO or sales by sufficiently attractive estimates, which has resulted in a lack of allocation distribution of funds supporters.
Investors in Funds-“Limited Partners” or LPs-instead turned to secondary markets to try to find customers for their stakes, while private joint stock companies operated by funds-“General Partners” or GPs-also sought alternative ways to cash in your investments.
“A record secondary amount of last year was fueled by continuous low levels [cash] Distribution at a time when many LPs were eager for liquidity, ”said Scott Beckelman, a global co-leader of secondary counseling consultation in Jefferies.
And limited partners – often institutions such as pension funds, foundations or state -rich founders – and general partners sold record quantities on the secondary market last year, according to Jefferies.
Limited partners sold shares in funds worth $ 87 billion, which is a 36 percent increase compared to the previous record of 2021, after a shortage of tasks in the first year of pandemia has caused a payment of payment and a portfolio rebalance that became too burdened toward private capital.
Investors in funds usually sell their discount stakes, but Jeffers said that the difference decreased last year on 6 percent points below net value of assets for proportion in buying funds, compared to 9 percentage points a year before.
Jefferies said the increase in price indicates the belief that private capital managers will soon be able to sell the basic portfolio companies, while the Wall Street is preparing to return the business under another Trump administration.
Redemption funds have fought with powerful antimonic regulators in recent years, both in Europe and in the US. However, the change of guard in the main bodies for market competition in the US, the EU and the United Kingdom could serve as an introduction to Laissez-Faire approach to merging and acquisitions and help facilitating going out.
Price prices in private credit funds have increased even sharper than those in the redemption funds – with 77 percent of the property value at 91 percent – after the launch of new funds intended for the purchase of used share of private debtors.
Real estate prices and risk stakes are slightly lower, 72 percent or 75 percent of the basic property value.
“You have so many fundamental LPs who say, ‘I have not had a distribution from my portfolio of entrepreneurial investments for over 24 months,’ said Todd Miller, who also works as a global co-pursuit of secondary counseling consultation for Jefferies.
Private capital companies also turned to secondary markets, with general partners who sold property worth $ 75 billion in 2024, 44 percent more than a year before.
The vast majority of this – $ 63 billion – came from those managers who sold their assets from one of their funds to a newer fund that managed by the same company, the so -called Continuion Vehicle.
The extension holders have become a popular option for private investment companies to return money to investors in one fund without the need to find a customer for the whole company from a portfolio – especially where such sales may not achieve a favorable assessment for the manager.
Three out of approximately 30 exit events of the European private investment company EQT last year included the transfer of stakes between EQT funds, said the person familiar with this issue for the Financial Times, although all three also brought in external investors.
