Elm Capital: Private Markets Review – September 2020

Elm Capital: Private Markets Review – September 2020

  • Private market industry participants continue to tackle the challenges and opportunities presented by the Covid‐19 pandemic:
  • GPs have resumed fundraising activities, aided by virtual due diligence sessions to secure new commitments from LPs. Elm Capital’s clients have capitalised on the uptick in deal activity to execute new buyouts, add‐ons and exits in their portfolios.
  • LPs have begun to adjust to the new norm, gradually resuming regular business activities within their primary investment programs and engaging with the secondary market for their portfolio management activities. Although the general restart of the global economy has been positively received, Elm Capital believes that an uncertainty discount will remain when pricing secondary transactions.
  • Secondary market volumes were impacted significantly by the global Covid‐19 pandemic as market participants diverted their internal resources on portfolio monitoring, with a more cautious approach to new deal activity, and managers’ asset valuations lagged in reflecting the rapidly changing economic environment. Secondary market pricing for buyout, growth and venture names trended downwards towards levels last observed in 2012.
  • Despite the continuing challenges presented by current market conditions, during the current quarter, Elm Capital’s clients have successfully closed on new primary commitments, with MVI Fund II holding a first closing and Kester Capital II successfully holding an oversubscribed final closing. Elm Capital also continued to successfully execute and close LP portfolio sales.

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