A second-half rise in transactions was not enough to push 2016 deal volume past the record high set the year before, according to a report by Triago.
The advisory firm and placement agent estimates $39 billion traded on the secondaries market in all of 2016, slightly lower than $40 billion in 2015, according to Triago’s quarterly report released in December.
Rising valuations for both private and public assets drove more transactions later in the year, the report noted, with deal volume rising from $8.3 billion during the first quarter to $8.5 billion in the second quarter, with $10 billion and $12.3 billion in the third and fourth quarters respectively.
The firm estimates there is $84 billion in dry powder.
Pricing on average rose 2 percentage points in the second half of the year with stakes trading at a 7 percent discount to net asset value during the period, compared with 9 percent in the first half, the report noted.
Pricing for venture capital funds rose 3 percentage points to their highest quarterly level since 2014, a sign certain investors are optimistic about the strategy, David Lanchner, a Triago spokesman, told Secondaries Investor.
“This is at a period in time when a lot of people are still worried about the high prices of VC portfolio companies in funding rounds,” Lanchner said. “There’s clearly a large number of investors who see value in VC even though there’s much hand-wringing concerning valuations.”
Large buyout funds were the only strategy where pricing fell. Stakes in these funds traded at 95 percent of NAV, a slight dip from 96 percent.