Over the past decade, the secondary private equity market, once considered a haven for difficult times, has developed rapidly, and investors have been able to create, diversify and diversify their private equity portfolio and liquidity for sellers, as well as balance flexibility. A cost-effective way. In the last decade, the demand for private equity has been high, and investors who want to increase and diversify private equity have invested heavily in secondary market funds.
According to a recent Prelim study, the total number of Secondary Private Equity Liquiditytransactions in 2017 was about $ 60 billion. In 2017, 35 funds (submarines) were closed, investing in the private secondary market, which amounted to $ 40 billion. Portfolio management and liquidity are key factors determining the sale of shares in the secondary market, and most transactions come from pension funds and fund management funds.
Since the beginning of the second quarter of 2018, the average net IRR of all secondary crops got estimated at 15.8%. Level 2 requires an investment of $ 30 billion.
Brett Hickey, founder and CEO of Star Mountain Capital, spoke about his views on the aftermarket opportunities for investors interested in increasing the distribution of private investment. Star Mountain Capital is an asset administrator practicing indirect investment, fund investment, and subsequent trading in mid- and low-priced businesses in the United States.
Can nyppex provide a summary of the kinds of investment transactions that happen in the secondary market?
There are two main types of secondary trading for private equity. First, buyers can directly invest in managed companies or nyppex portfolios from other investors who need liquidity (“get interest rates directly”). In this instance, customer obliquely takes a percentage in the collection within the use of individual ownership, which keeps those assets, as a practice, it considers the residual capital responsibilities of the seller of the fund.
What are the main benefits of buying a grant over investing in a donation?
Our main advantage is that subprime loans usually include funds with significant allocated capital, and instead of blindly promising them, managers analyze the assets acquired. It is the beginning of the life of the investment and depends on managers for a good investment. Support projects hold property of data, including knowledge that can use to creating investment choices.
Can nyppex give some critical considerations when choosing a comprehensive audit process for trading in the secondary market?
Firstly, the fact those individual investments in equity or fund securities are getting sold at a price lower than the prescribed amount of net assets is a more profitable investment than personal assets listed in the cost of capital or net assets of the fund. It does not necessarily mean this. Higher than equity. It is necessary to analyze ownership of portfolio to fund to assess whether the calculated value of the fund is suitable and determine the price corresponding to the estimated amount that nyppex want to pay. Trading in equity can be a desirable investment option because it implies a benefit that it is not get included in the price list.
