Changes in CalPERS’ Private Equity Fund Holdings

November 18, 2008

Here’s an interesting article from over at PEHub concerning the changes in CalPERS’ private equity fund holdings between the end of year 2007 and end of the first half of 2008. Dan Primack noted that there were 96 funds listed in the prior report that didn’t make the new list. To all of us keeping score at home, this means that CalPERS divested over 25% of its private equity fund investments between the end of 2007 and the end of Q2 2008 (Dan notes that this does not include 2008-vintage funds or the California Emerging Ventures portfolios). The vast majority of these disposed of investments ended up as part of a record breaking year for secondaries.

PEHub put together a handy little spreadsheet comparing CalPERS’ private equity fund holdings between the end of 2007 report and the end of Q2 2008 report. They’ve indicated funds from the old report in red, while funds from the new report are in black. If you see a red one without a corresponding black one, that means it’s no longer a CalPERS holding:

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Mid-Year 2008 Private Equity Secondaries Report

September 19, 2008

Cogent Partners has released a mid-year report and summary concerning pricing and outlook in private equity secondaries. It’s mainly looking at North American funds (81%) with a fund type breakdown of: 54% Buyouts, 31% Venture, and 15% being the ever mysterious “other”.

Unless you’ve been living in isolation on the top of a mountain peak (and after the events of the past ten days that may not be such a bad idea), you’ll know that Private Equity deal-making has been on the slow slide thanks to the credit crunch and it’s banking repercussions.

While Cogent found the pricing for secondary deals to be strong through the second half of 2007, the first half of 2008 has seen pricing fall inline with the declines in public equity values, when adjusted for inflation (no real surprise there). The average high bid for all secondary transactions stated as a percentage of net asset value fell to 84.7%. Prices overall are at their lowest levels since 2003.


Abénex Capital and Ixen Purchase Buffalo Grill

September 4, 2008

While I was on holiday Abénex Capital and Ixen completed a secondary transaction for that most “chic” of French brasseries…that’s right, the Buffalo Grill!

The two firms acquired the restaurant chain from Colony Capital and Eurazeo who had acquired the business in October 2005 in a €340M public-to-private transaction.


Private Equity Secondaries Market Set to Break Record

August 11, 2008

As LPs look to sell-off certain interests in private equity funds as tougher times force them to rethink strategy, the sales of limited partnerships in private equity funds is expected to grow by 20% to a record $18bn this year, according to NYPPEX. This is in line with the overall growth being experienced by the secondaries as a whole. The secondaries market typically fairs better in difficult times and now is no exception. Many institutional investors are looking for some immediate returns to their portfolio investments in light of current market conditions.

Also, 84% of institutional investors are worried that GP strategy “drift” will effect their returns. The irony cannot be lost that often drift is a result from LPs increasing appetite for PE as an asset class. All the money LPs have given PE firms has to go somewhere.