Private equity managers are becoming more willing to reduce portfolio valuations following several years of inflated asset marks, as pressure to return capital to investors increases, according to a report by Bloomberg.
Jason Safran, chief investment officer of Texas Christian University’s $3bn endowment, said at the Bloomberg Invest Dallas conference that private equity portfolios had been significantly overvalued between 2022 and 2024, but that valuations were now becoming more realistic.
Safran reportedly said growing investor impatience was encouraging managers to accept exits below previously reported valuations or transfer assets into continuation vehicles, reflecting pressure to generate liquidity from ageing portfolios.
Olivia Newell, managing director and head of Texas at Partners Capital, noted that some managers had adopted more conservative valuation practices, preferring to mark assets cautiously rather than risk crystallising losses at exit. The comments come as private equity firms continue to manage investments acquired at elevated valuations during the low-interest-rate period.
