SecondaryLink’s Post

Here’s what investors had to say on NAV loans in Coller Capital’s Global Private Capital Barometer: - 48% of respondents are more likely to use NAV financing as a tool for generating liquidity in the next 12-18 months - 57% of respondents said they are not comfortable with the use of NAV finance in the PE industry - Financing add-on acquisitions emerged as the preferred application of NAV financing - The introduction of additional leverage in the system was the biggest concern of LPs when considering NAV financing

Whether or not you invest in actively managed mutual funds, their shareholder letters can be worthwhile. To be sure, many of them are uninformative. But, there are a few gems worth reading for their insights. (Read them critically, though, since portfolio managers like to “talk their book.") One of those gems is written by Matthew Fine, the manager of Third Avenue Value. Carrying on the literary tradition of #ThirdAvenue founder, Marty Whitman, Fine produces interesting, well-written letters. (Note: this is in no way a recommendation or endorsement of Third Avenue Value as an investment vehicle.) Fine’s second-quarter letter (https://lnkd.in/g-XfDqSR) considers the implications if “the era of ever-falling U.S. interest rates is behind us.” Fine believes it is, but whether it is or not, he effectively explains how particular industries and investments have benefitted from four decades of falling rates and easy credit—with one major hiccup, 2007-2009. The commercial real estate and private equity industries, for instance, have feasted upon cheap debt to make acquisitions and increase asset values. As Fine writes, “One can’t help but marvel at what a difference four decades of consistently falling borrowing costs can make.” Because of cheap credit, “asset values of almost all debt-financeable assets have inflated considerably.” This is not news, but it's easy to forget just how much of an impact financial leverage has had, whether you use it directly or not. What strikes Fine is how disruptive higher rates over the past two years have been. (He points out that today's rates are not high by historical standards: the yield on the 10-year Treasury has averaged 5.9% over the past 50 years versus 3.8% currently.) He cites several metrics showing how the health of private equity has deteriorated, echoing a recent Wall Street Journal article ("Private Equity Firms Desperate for Cash Turn to a Familiar Trick"). He concludes that “the trajectory of interest rates is much more important than the absolute levels.” It's one of several points from the letter worth pondering. Keywords: #Investing, #MutualFunds, #PrivateEquity, #InterestRates, #Debt

Need for liquidity and strategic repositioning are the top reasons for investors to sell in the secondary market, according to Montana Capital Partners’ annual investor survey. 85% of survey respondents plan to maintain, increase, or for the first time introduce an allocation to secondaries. Create a free SecondaryLink account: https://lnkd.in/g5t_Hgqg Subscribe to our newsletter: https://lnkd.in/eguN2zZn #Secondaries #Secondary #SecondaryMarket #AlternativeInvestments #Research #MarketResearch #Liquidity #LPs Dr. Marco Wulff, Eduard Lemle, Maëlle Reichenbach, Niklas Kleine Jaeger https://lnkd.in/eg_qSvkM

Paul Parsons, Portfolio Manager/Analyst at Northcape Capital and Warakirri’s Australian Equities funds says despite an uncertain backdrop, the operating environment has been good for Australian companies in 2023. Click below for Paul’s outlook where he considers the drivers for equities in 2024 and why taking a “quality” approach to company selection is the key in a volatile environment. Australian Equities Outlook - https://lnkd.in/g9gQQFhX #equities #marketoutlook

N|B POST - Co-investments. Opportunistic Ride to Private Equity Markets   Private Equity transaction value has been falling in the first six months of 2023, according to PitchBook. We believe the explanation is that general partners’ (GPs) demand for co-investment capital is growing, and it is meeting lower supply of capital from a smaller number of co-investors. Does that mean the current environment for co-investments is particularly attractive? We believe so, and here we explain why. > https://lnkd.in/e7bSKuVh   Neuberger Berman, David Morse, Jackie Wang #privateequity #marketview #privatemarkets #assetmanagement

Public markets remain at high level, with investors scrambling for growth opportunities. Yet one corner of the market remains depressed, offering latent value for investors prepared to look a little more closely ⤵️ Find out more in our latest commentary from Richard Hickman, Managing Director of HarbourVest Partners and a member of Invest Europe’s Listed Private Capital Roundtable ➡️ https://lnkd.in/etznXeFZ #PrivateEquity #VentureCapital #ListedPrivateCapital #LPCR #ListedPrivateEquity

Reach out to explore how SMAs may align with your financial vision! #ClearDirectionInvestments #ClearDirection #PeopleFirst #FinancialLegacy

Check out the article I did for this month’s edition of PA magazine where I discuss the power of language and how it can be harnessed by professionals to get more people engaged with investing. Find the link below! #investment #assetmanagement #financialadvice #financialeducation

Why we believe Co-investments are attractive

Public markets are once again at new highs, with investors scrambling for growth opportunities amid fresh optimism. Yet one corner of the market remains depressed, offering latent value for investors prepared to look a little more closely ⤵️ Find out more in our latest commentary from Richard Hickman, Managing Director of HarbourVest Partners and a member of Invest Europe’s Listed Private Capital Roundtable ➡️ https://lnkd.in/etznXeFZ #PrivateEquity #VentureCapital #ListedPrivateCapital #LPCR #ListedPrivateEquity