The Private Equity Secondaries Market During the Financial Crisis and the “Valuation Gap”
AbstractThis descriptive paper analyzes the performance of the private equity secondaries market during the financial crisis 2008-2009, in order to understand the effective liquidity of private equity investments during this episode of market stress. We document that the secondaries market followed the development of the crisis very closely, with effective market liquidity contracting in early 2009 to only a fraction of the volume earlier, and a quick recovery afterwards that showed no signs of more protracted turbulences than the stock market. We argue that the particular form of illiquidity in the secondaries market can be best understood as the cumulative effect of behavioral and accounting-based elements. The available evidence indicates that the liquidity and the relative resilience of the secondaries market are efficient.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 39550.
Date of creation: Apr 2011
Date of revision:
Publication status: Published in The Journal of Private Equity 3.14(2011): pp. 42-54
secondaries; buyouts; financial crisis; illiquid asset class;
Find related papers by JEL classification:
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- G01 - Financial Economics - - General - - - Financial Crises
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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