Secondaries bids for energy and venture capital funds showed depressed pricing in the first half of this year, with average bids lower than buyout, real estate and other fund types, according to a report by advisory and placement firm Harken Capital Securities.
Median bids for energy funds were between 61 percent and 80 percent of net asset value (NAV). Venture capital funds fared slightly better, with bids between 75 percent and 84 percent.
“The drop in oil prices coupled with reduced buyer interest pushed pricing for energy funds down during Q1, but [it] recovered somewhat during Q2,” the report stated.
Some secondaries buyers have shied away from energy as volatility in oil prices has made it difficult to analyse energy funds. Meanwhile, venture capital is generally speaking a difficult asset class to price in the secondaries market due to the lack of visibility and the fact that companies are often early stage and in nascent industries.
Boston-based Harken’s 1H 2015 Private Equity Secondaries Market Update, published in July, showed median bids for all types of funds received by the firm during the period were between 83 percent and 94 percent of NAV. Buyouts were the most popular fund type, with median bids between 92 percent and 98 percent of NAV.