Pricing

Private equity performance has held relatively steady compared with the pain in the public markets so far this year. That may start changing over the new few weeks.

While initial secondaries volume estimates point to a record first half, expectations for full-year 2022 may have to be revised downward.

A market downturn, diverging views on valuations and ‘risk off’ attitudes are causing many GP-led deals to be repriced.

The booming secondaries market for growth assets is on pause, although deals can still happen if sponsors offer a discount.

Oliver Gardey and Ryan Levitt discuss market volatility, the need for specialism in secondaries and the likely drivers of LP deals in 2022.

A simultaneous numerator, denominator effect may leave some LPs significantly overallocated at a time when their GPs are asking for re-ups.

Declining multiples spell trouble for deals done in recent years, when valuations were at historic highs, said ex-Ardian secondaries head Vincent Gombault.

Despite the shift to newer vintages, early distributions and higher IRRs remain important to secondaries investors, said managing director Cari Lodge.

As Brazilian pensions finish divesting their private assets, buyers hope a primary investing boom will have positive implications for the secondaries market.

The CalPERS sale is among a slew of traditional LP portfolio sales to hit the market since the fall, with prices high and buyer interest piqued by more diversified investments.