The Private Equity Investment Boom

The New York Times DealBook Blog discusses the Boom in Private Equity’s Secondary Market.

There is a surge in the secondary market for stakes in private equity funds.

According to DealBook:

“Investors in private equity funds typically have to wait as long as a decade to get their money back. But many are now cashing out ahead of schedule by selling their investments into a secondary market, reflecting the buoyant state of private equity.

“These so-called secondary sales of stakes in funds — including private equity funds, venture capital funds, and real estate funds — totaled $47 billion in 2014, an increase of roughly 80 percent from the previous year, according to new research by the investment bank Evercore. The deal volume was higher than at any point since the financial crisis, the research shows.

“The soaring stock market in recent years, combined with low-interest rates and other factors, have helped bolster the value of private equity funds, which invest in privately held companies or take companies private through leveraged buyouts. Many investors are apparently seizing an opportunity to take cash now, rather than wait for the funds to mature.”