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Performance of Secondaries Funds

by Bronwyn Williams

  • 24 Jun 2011
  • PE

Preqin provides benchmark data for a variety of private equity strategies. Users are able to analyze returns information by median called-up, distributed and remaining value ratios for each vintage year. Funds with vintage years prior to 2003 have less capital still tied-up in investments and have distributed the majority of capital back to investors. Funds with vintage years prior to 2003 have drawn almost all committed capital. Vintage 2000-2002 funds are looking to return around 1.60x invested capital back to investors and vintage 2003 funds are showing an expected return of 1.77x once all unrealized investments are exited.

Funds with vintage years 2004 and later still have capital to call with vintage 2004 funds showing a median called-up figure of 88%. Funds with vintages 2006 were the most affected by the financial crisis and these funds are expected to return 0.96x back to investors.

Vintage 2009 funds are showing a multiple of 1.31x, compared to 0.98x for all private equity funds, indicating that these funds have picked up some bargain investments in the secondary market. It should be noted that funds with recent vintages are still early in their investment life cycles and the performance data is likely to change over time as managers have time to add value to their investments

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