Buyout pricing remains most competitive in H1

Discount to NAV for buyout funds remained smaller than any other fund type, according to a new report.

Median bids for mega buyout fund stakes were between 92 percent and 98 percent of net asset value (NAV), confirming buyouts as the most sought-after fund type during the first half of this year, according to a report by advisory and placement firm Harken Capital Securities.

The firm’s 1H 2015 Private Equity Secondaries Market Update, published in July, also shows bidders were willing to pay more for small to medium buyout funds than the remaining other fund types, with spreads between 87 percent to 99 percent.

“Buyout funds remain the most competitive, with a number of small/mid buyout funds pricing well above NAV,” the report noted.

Sellers took advantage of favourable market conditions to sell tail-end funds and non-core funds for portfolio management reasons, according to the Boston-based firm.

Overall, median bids for all types of funds received by Harken during the period were between 83 percent and 94 percent of NAV.