Private equity funds that are at the end of their lifecycles pushed worldwide sales of private equity limited partnership interests up 2.5% to $18.7 billion in the first half of this year, said a new analysis by NYPPEX, a private equity secondary market brokerage firm.
NYPPEX defines “end-of-life” funds — also called “tail-end” funds — as funds with less than 30% of their remaining unrealized value or that are more than 9 years old.
“In our view, the key driver was secondary transactions in `end of life' funds, which NYPPEX estimates increased approximately 35% year-over-year,” said Laurence Allen, NYPPEXmanaging member.
Tail-end funds grew to 43% of the secondary volume in the first half of this year from 35% at the same time of 2014, NYPPEX data show.
Without the sales of end-of-life funds, NYPPEX estimates secondary transaction volume would have declined slightly in the first half of 2015 compared with the year-earlier period.