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Private equity recovery rates at record levels

The recovery rate for private equity transactions – the proportion of capital recovered in any deal where some loss has occurred – continues to maintain record levels of around 80 per cent, according to figures released by CEPRES.

The results come from the new Loss & Recovery Benchmarking in PE.Analyzer, the first platform to benchmark private equity deals, portfolio companies and funds. The analysis is based on investments in 34,743 portfolio companies across 2,235 private equity funds and USD1.5 trillion of capital. The new Loss & Recovery Benchmarking is now available with PE.Analyzer together with performance benchmarking.

“With concern of overheating markets this is great news and shows GPs are working hard to preserve value in their investments,” says Dr. Daniel Schmidt – CEO, CEPRES GmbH. “By maintaining discipline and negotiating stronger covenants, GPs show they learned the lessons from the credit crisis. Further good news is that Default Rates are largely flat since 2010 and don’t indicate any increased market stress, thus our outlook for private markets remains positive despite pricing and leverage pressures.”

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