Waterland tops Palico fund pricing list

A stake in the Dutch PE firm's 2015-vintage fund sold for 121% of NAV, according to a survey of recent transactions by the online marketplace, with average pricing at par.

A 2015-vintage, Europe-focused growth fund was among the hottest properties on the secondaries market in the first half of 2019.

A stake in Waterland Private Equity Fund VI, managed by Netherlands-headquartered Waterland Private Equity Investments, sold for 121 percent of net asset value, according to a survey of limited partners that have sold in the past six months conducted by online marketplace Palico. That makes it the highest priced of the 36 funds under consideration.

The 2015-vintage Baring Asia Private Equity Fund VI and 2013-vintage Fifth Cinven Fund round out the top three, selling for 113 percent and 111 percent of NAV, respectively. The one secondaries fund included in the study, the 2009-vintage Lexington Middle Market Investors II, sold for 94 percent of NAV.

The average price across the 36 funds was 100 percent of NAV, slightly down on 102.5 percent recorded in the last survey in January. According to Palico, this drop-off reflects the fact that a smaller proportion of funds traded in the first half of 2019 counted as early secondaries funds, “which typically attract higher pricing than older funds since they are considered to have more potential upside”.

Palico puts dry powder for secondaries at $200 billion, around three times last year’s transaction volume of around $70 billion: “Prices should retreat from par in the event of a recession, but the drop should be cushioned compared to past downturns by large amounts of dry powder and the continuing availability of leverage,” a spokesman for Palico told Secondaries Investor.

Waterland Private Equity Fund VI raised €1.28 billion, against a target of €1.25 billion, in April 2015 after around four months in market, according to PEI data. ATP Private Equity Partners, Lancashire County Pension Fund and State of Wisconsin Investment Board are among the investors in the fund.