The median of the highest bids Elm Capital received for fund interests reached 97 percent of net asset value (NAV) during the second half of 2014, according to a report from the London-based advisory firm.
The median price for buyout funds was 97 percent of NAV, and Elm noted that roughly one quarter of the prices it received for buyout funds were at par or higher. Most of the funds were large-cap US and European funds with well-diversified portfolios. Good quality mid-market funds that are in short supply on the secondaries market also priced at par or above.
The median price of interests in funds of funds rose to 91 percent of NAV, while prices for venture capital funds remained stable at 87 percent.
The increasing number of transactions on funds of funds was a notable trend in 2014, while fewer limited partners expressed interest in selling venture funds. Venture funds tend to attract larger discounts because there is a smaller number of buyers.
High prices across the secondaries market were supported by rising stock markets and “the insatiable appetitive of secondary players”, Elm said in the report. The resulting high prices attracted potential sellers and the transactions Elm closed were with a mix of new and repeat sellers.