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LBO pricing approaching pre-pandemic levels – Setter

The top average bid for a buyout fund was close to pre-covid levels at the end of last year, with prices for VC and infra up in year-on-year terms.

Pricing for the most commonly traded strategies is nearly back to where it was one year ago, according to research by Setter Capital.

The average top price for a buyout fund was 92.94 percent of net asset value on 31 December, compared with 93.15 percent a year earlier, the Toronto-based intermediary found. The price had dropped to 88.63 percent in the second quarter of last year, the data show.

Venture capital, cleantech and infrastructure funds had the strongest year-on-year increases, their average top prices growing by 9.24 percent, 11.57 percent and 8.42 percent, respectively.

The average top price of an energy fund was down 12.55 percent year-on-year, making it the biggest faller. The top prices for secondaries vehicles and funds of funds were also down on an annualised basis.

Speaking to Secondaries Investor last month, head of secondaries at Hamilton Lane Tom Kerr said that while prices were recovering, the recovery was not even across the market.

“I still believe there is a wide gap between different buyers and their views on what different assets are worth. And there are certainly in-favour funds versus out-of-favour funds,” he said.

Setter’s findings are based on actual or indicative bids for 2,286 individual funds.