Asset managers are selling private equity holdings via secondary market transactions at a record rate as they look to cover losses from other investment and rebalance portfolios, according to a report by Reuters.
The report says that the sell-off is another signal that investors are beginning to “fall out of love” with alternative investments that until recently were flavour of the month.
With deals being negotiated privately, total turnover is difficult to gauge, although the report cites investment firm Hamilton Lane as saying that some $224 billion in private equity stakes have been offered in the secondary market this year to mid-November. The discounts on offer meanwhile, suggest that investors are in a hurry to exit their investments.
Not all have been sold, but analysis by Preqin estimates that the value of secondary transactions up until the third quarter was about $65 billion, which is approaching 2021’s total of just over $70 billion and much higher than previous years.
