In the third quarter of 2009, fund valuations for all private equity increased for the second quarter in a row, following quarter-on-quarter declines in 2008. Between Q2 and Q3 2009, private equity funds measured an average increase in NAV of 4.1%.
Distressed private equity funds are showing the largest quarter-on-quarter increases in NAV, at 9.6%. These funds posted significant declines in Q4 2008, with the second-largest decrease in NAV between Q3 and Q4 2008 of all types of private equity fund. Buyout funds show a 5.9% increase in value over Q3 2009, and the NAV of mezzanine funds went up by 5.7% in the period. Venture focused funds show an increase of 2.1% for Q3 2009.
Owing to the reporting schedules of the underlying portfolio funds in primary and secondary funds of funds, these strategies typically lag a quarter and so the fund valuations are usually representative of the previous quarter. As such, the change in NAV for these funds is not as marked as it is for the other types.
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