The COVID‑19 pandemic continues to have profound impacts across financial markets, including the private equity secondary market.
While there is still significant uncertainty as to the full impact of the COVID-19 virus, past market corrections can provide insight as to how the secondary market may react in the current environment. Historically, market downturns have affected the secondary markets in the near term by lowering transaction volumes, slowing the pace of realizations and distributions (this is true for private equity more broadly as well), and putting downward pressure on pricing. As demonstrated during the Global Financial Crisis (GFC), once volatility subsides and stability is restored, secondary markets have generally rebounded from market downturns with strong volume and have offered attractive opportunities for investors with available investment capital.
In this paper we discuss the following key points:
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