A credible source of market insight, gathered over the last 19 years.

Elm Capital provides clients with the latest information on industry standards and trends.

Elm Capital releases periodic updates summarising our latest observations of private capital markets. The commentary utilises data collected from Elm Capital’s fundraising and secondary advisory activities.

April, 2024

Elm Capital: Secondary Markets Review – April 2024
  • The secondary market experienced strong growth in 2023, steered by a significant uplift in LP-led transactions in H2 amidst a challenging liquidity environment and the surge of capital raised for secondary funds.
  • As we venture further into 2024, recession fears have dampened and the secondary market continues on a positive trajectory following on from the end of 2023, providing a robust tool to generate liquidity for both LPs and GPs.
  • Lack of distributions drives deal flow in the secondary market:                                       2023 was marred by continued geopolitical tension and international conflicts, significant government spending causing high inflation, and subsequent tightening of monetary policy. The resulting rise in interest rates had a particularly negative impact on private equity markets. During the years of ultra-low interest rates, fund managers were able to borrow sizeable amounts at low cost, and to acquire companies at high valuations. In the current environment of higher rates, leverage is significantly more expensive, and it has become challenging for fund managers to exit companies with a decent uplift, as valuations have generally come down
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May, 2023

Elm Capital: Secondary Markets Review – May 2023
  • With COVID-19 easing, 2022 displayed the first signs of normality with the resurgence of in-person meetings and reduced out-of-office work schedules. Despite this, 2022 was not without its own issues, namely;
    • the conflict in Ukraine;
    • early signs of macro headwinds caused by government spending;
    • the global energy crisis;
    • the drying up of excess capital following the lockdown; and
    • the rise in interest rates.
  • In consequence of the political and economic uncertainty during 2022, Elm Capital observed an increase in caution taken by market participants as investors attempted to navigate through adverse conditions. Investors subsequently reduced their commitments to both primary funds, associated with high blind pool risk, and secondary market opportunities, which maintain sticky valuations due to infrequent reporting in comparison to public markets.
  • The sharp fall in the stock markets between Q1-Q2 of 2022 and the relatively insignificant adjustment in private equity valuations have caused many investors to become overallocated to the latter asset class (the so called “denominator effect”). In addition, in an environment of higher interest rates, fixed income markets have become a more attractive asset class than when interest rates were close to zero or below.
  • As a result of the decline in public market valuations, secondary buyers priced in an anticipated correction of private equity valuations at year end, causing a widening of the bid-ask spread. Whereas in H1-2022 the median of the highest prices across all funds observed by Elm Capital was 88% of net asset value (“NAV”), in H2-2022, it decreased to 70%. Prices during H1-2022 were naturally very different before and after the start of the war in Ukraine. The median price for buyout transactions was in the single digit discount area before the Russian invasion.
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October, 2021

Elm Capital: Private Markets Review – October 2021
  • Private equity fundraising continued to reach new records in H1-2021, as sponsors collectively raised more than $400bn. However the tide did not lift all boats, as the fundraising gap between first-time funds and second or later-generation funds has continued to widen with emerging managers having a challenging fundraising experience, especially those who have not had the chance to previously meet with LPs in
  • Growth equity has been identified by both managers and investors as one of the greatest areas of opportunity post the pandemic, with multiple sources reporting record levels of deal activity and fundraising in the first half of
  • GPs have increased their degree of control in secondary processes, with single-asset deals on the These transactions are becoming increasingly dedicated to addressing specific needs of portfolio companies, involving single-asset sales coupled with raising additional capital to support growth and M&A.
  • For LPs, the human interaction during a physical meeting or onsite remains to some extent irreplaceable in assessing the sponsor’s team dynamics and in facilitating the development of the trust required to commit to new Virtual meetings, however, have found their place and become a well utilised alternative to physical AGMs.
  • For sponsors contemplating returning to the market in 2022, the benefit of securing a slot on an investor’s ‘calendar for 2022’ cannot be stressed enough, given investors’ physical capacity limitations to diligence their busy
  • In H1-2021, Elm witnessed a resurgence of limited partner portfolio management activity, capitalising on the NAV reflation in H2 2020 and increased buyer appetite for portfolio trades, to rebalance concentrated GP-led Tail-end shorter duration trades are back in demand, led by buyers’ confidence in managers’ ability to crystallise exits in their portfolios at an attractive uplift in valuations.
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March, 2021

Elm Capital: Private Markets Review – March 2021
  • Deal activity and confidence in private markets continued to improve, driven by the positive sentiment created by the distribution of effective vaccines to combat the Covid-19 pandemic:
  • The fundraising environment has remained robust with managers in the middle of ongoing fundraisings continuing despite the logistical challenges related to in-person meetings, and others preparing the launch of scheduled raises in 2021. Sector expertise is increasingly valued by investors and more managers are making sustainability and ESG factors an important part of their investment strategy.
  • Beyond the headline grabbing large-cap GP-led transactions, the market is vibrant with significant level of activity that is less publicised in the wider market, with managers utilising the secondary market to offer liquidity solutions, negotiate extensions and modify terms with their LPs.
  • LPs, to a large extent, have kept their pipelines busy with existing primary relationships or managers in their target list that they have tracked for several fund generations.
  • Re-rating of NAVs and supportive pricing optics have motivated the resumption of LP-led portfolio management activities. A year into the pandemic, buyers are now better equipped to assess Covid-19 risk and appetite for diversified portfolios has returned.
  • Secondary market pricing for buyout and venture interests displayed divergent trends in H2-2020, with buyout pricing rebounding while venture continued to trend lower. Buyer focus in H2-2020 remained on resilient assets and experienced managers that commanded higher pricing, whilst Elm continued to see a reduction of market activity in tail-end vintages.
  • In 2020, Elm Capital’s clients have successfully converted on new investor commitments, with Montefiore Investment V in France closing at its hard cap, MVI Fund II in the Nordics reaching its first closing, Kester Capital II in the UK closing at the hard cap, Armada Fund V in the Nordics closing on substantial new investor commitments, and Aksìa Capital V in Italy exceeding its target size. Elm Capital continued to successfully execute and close LP portfolio sales and GP-led transactions into year-end 2020. Most notably we advised on Project Hexagon, one of the first GP-led transactions into an evergreen vehicle in the infrastructure space.
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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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May, 2020

Elm Capital: Private Markets Review – May 2020
  • The rapid onset of the Covid-19 crisis has diverted attention of both GPs and LPs from new deal activity to estimating the impact of the lockdown on their portfolios.
  • GPs are equally focused on assessing the need of injecting capital into their portfolios and evaluating options to take advantage of market dislocation opportunities.
  • LPs spent the first few weeks of the crisis analysing how the cash flows from their portfolios would be impacted by the new environment, and are starting to look at new investment opportunities, albeit with enhanced diligence for new primary relationships and downside protection for secondary deal structures.
  • With the progressive implementation of Phase 2 and the reopening of select economies, we expect a gradual thawing of private markets activity over the course of 2020 and the restart of opportunistic capital deployment by both GPs and LPs.
  • We had already observed an increased risk aversion and detected a drop in secondary market pricing in H2 2019, with buyers requiring higher discounts to compensate for lower expected returns in a perceived top of the economic cycle. The current crisis is likely to amplify pricing volatility in the near term.
  • Against the difficult operating environment, Elm Capital successfully closed the fundraising of Montefiore Investment V, two GP-led transactions, and two LP-led portfolio sales in Q1 2020.
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September, 2019

Elm Capital First Half Newsletter 2019
  • The first half of 2019 saw the median of the highest prices for buyout funds rebound from the dip observed in H2 2018 back to recent historical levels
  • The median of the highest bids for buyout funds received by Elm Capital reached a level of 98% of Net Asset Value (“NAV”) in H1 2019
  • Transactions carried out in H1 2019 continued to evolve in diversity and complexity:
    • Growing number of GPs accessed the secondary market to provide liquidity for their LPs and to secure additional time and capital to achieve the full potential value of their portfolio
    • Secondary buyers continued to diversify their strategies beyond traditional LP fund commitments and expand the suite of liquidity solutions for GPs and LPs
    • Funds of funds continued to liquidate vintages over 10 years old to wind down vehicles approaching end of life
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March, 2019

Elm Capital Second Half Newsletter 2018
  • The second half of 2018 saw median prices for buyout funds decrease to levels last recorded in the first half of 2016
  • The median of the highest bids for buyout funds received by Elm Capital reached a level of 95% of Net Asset Value (“NAV”) in H2 2018
  • Transactions carried out in H2 2018 continued to evolve in diversity and complexity:
    • Fund of funds continued to liquidate vintages over 10 years old to wind down vehicles
    • GPs accessed the secondary market to provide an exit route for their LPs and to secure additional time and capital to achieve the full potential value of their portfolio
    • LPs explored alternative liquidity solutions to traditional LP fund secondaries to free up capital for new primary commitments
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September, 2018

Elm Capital First Half 2018 Newsletter
  • The first half of 2018 saw median prices for buyout funds stay close to their record levels.
  • The median of the highest bids for buyout funds received by Elm Capital reached a level of 99% of Net Asset Value (“NAV”) in H1 2018.
  • Transactions carried out by Elm Capital in H1 2018 were of a more varied nature than in previous periods:
    • Fund of funds continued to liquidate vintages over 10 years old in an attempt to wind down vehicles
    • Sellers were increasingly motivated to sell more recent vintages to take advantage of strong pricing, and to reduce exposure whilst crystallising performance
    • Liquidity offers allowed GPs to offer an exit route for LPs, and to staple the transaction to a primary commitment in some cases
    • GP-led transactions also provided solutions for GPs, LPs and portfolio companies in more complex situations
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October, 2017

Elm Capital First Half 2017 Newsletter
  • Prices in the first half of 2017 increased compared to the second half of 2016, equalling the peak pricing levels seen in the second half of 2015.
  • The median of the highest bids received by Elm Capital was 98% of net asset value across fund types
  • The prices being offered for buyout funds ticked up to 100% of net asset value, equalling the record level seen 18 months ago
  • The first half of the year saw new players emerge on both the buy and sell side, with non-traditional buyers such as pension funds entering the market
  • Fund-of-fund managers are now approaching the market in record numbers, both as a way to liquidate pre-2007 tail end vehicles and to crystallise performance on more recent vintages
  • With interest rates still at record lows, cheap debt continues to support leverage in transactions, though rate hikes are on the horizon
  • GP-led transactions continue to be an important theme in the secondary market
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March, 2017

Elm Capital Second Half 2016 Newsletter
  • Prices in the second half of 2016 ticked up compared to the first half of the year, but remain below the peak seen at the end of 2015.
  • The median of the highest bids received by Elm Capital was 95% of net asset value across fund types
  • The level of bids being offered for buyout funds remained high, at 98% of net asset value, but below the record level of 100% seen twelve months ago
  • As pre-2007 vintages become increasingly tail-end in nature, a growing number of fund-of-fund managers are looking to the secondary market as a way to liquidate their older vehicles through portfolio sales
  • With interest rates still at record lows, cheap debt continues to support leverage in transactions
  • GP restructurings continue to be an important theme in the secondary market
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September, 2016

Elm Capital First Half 2016 Newsletter
  • Prices in the first half of 2016 softened due to a variety of factors. Low commodity prices, the slowdown of activity in China, expectations of a rise in US interest rates and uncertainty ahead of the Brexit referendum and the US presidential election have created significant market volatility and generated a widespread sentiment that private equity valuations might have reached a peak
  • The median of the highest bids received by Elm Capital was 93% of net asset value across fund types
  • The level of bids being offered for buyout funds remained high, at 95% of net asset value, but below the record level seen one year ago
  • Portfolio management activity continued as investors capitalise on high prices and we saw an increase in the liquidation of tail end portfolios
  • Secondary funds continue to outbid other categories of buyers, however family offices and endowments showed increasing interest as prices dip as opportunities arise due to lower pricing and increasing use of the secondary market
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March, 2016

Elm Capital Second Half 2015 Newsletter
  • Prices in the second half of 2015 have held at record highs despite increased market volatility
  • The median of the highest bids received by Elm Capital was 98% of net asset value across fund types
  • We saw unprecedented high levels of bids being offered for buyout funds, with prices reaching par on average
  • Portfolio management activity has increased as investors seek to capitalise on high prices
  • Secondary funds continue to outbid other categories of buyers
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March, 2015

Elm Capital Second Half 2014 Newsletter
  • Prices in the second half of 2014 have reached record highs
  • The median of the highest bids received by Elm Capital was 97% of net asset value for buyout funds, exceeding the levels reached in the previous half of the year
  • We saw an increase in the number of funds of funds being offered for sale with prices reaching 91% on average
  • Funds of funds and family offices have continued to be opportunistic sellers of single fund interest and of portfolios
  • Secondary funds continue to outbid other categories of buyers
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September, 2014

Elm Capital First Half 2014 Newsletter
  • Prices in the first half of 2014 remained high for buyouts and have risen across all other categories
  • The median of the highest bids recorded by Elm Capital was 95% of net asset value (“NAV”) for buyout funds, in line with what we saw in the second half of 2013
  • Prices for all other private equity fund types were up, with the median of the highest bids at 88% for venture capital funds, 95% for energy funds and 85% for funds of funds
  • High prices increasingly  attract opportunistic sellers
  • Family offices and funds of funds were the most active sellers
  • Secondary funds were the most aggressive buyers successfully closing the majority of transactions we were involved with
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February, 2014

Elm Capital Second Half 2013 Newsletter
  • Prices on the secondary market have risen sharply in the second half of 2013 following the continuous rise in public equity markets and significant fund distributions
  • The median of the highest bids on buyout funds recorded by Elm Capital in H2 2013 was 95% of net asset value (“NAV”) compared with 89% in H1 2013 and 90% in H2 2012
  • The median of the highest bids on venture capital funds was 74% of NAV, vs. 75% in H1 2013 and 70% in H2 2012
  • A variety of sellers have contacted us during H2 2013, with clear predominance of family offices and funds of funds and reduced presence of financial institutions
    Portfolio management and funds’ performance, more than liquidity and regulation, currently appear to be the prevailing reasons for using the secondary market
  • On the demand side, secondary funds represented over 50% of players we interacted with during H2 2013, but generalist funds of funds remained active buyers
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February, 2014

Elm Capital First Half 2013 Newsletter
  • Asset Values’ steady increases and significant distributions
  • In H1 2013, the median of the highest bid was 89% of NAV for buy-out funds, vs. 90% in H2 2012 and 86% in H1 2012
  • For venture capital funds the median was 75% of NAV, vs. 70% in H2 2012 and 75% in H1 2012
  • We continued to see family offices and funds of funds using the secondary market to reallocate resources and for portfolio management
  • Secondary funds have been active buyers but fewer closed deals leave ever high levels of dry powder to be deployed in the coming months
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February, 2013

Elm Capital Second Half 2012 Newsletter
  • Prices on the secondary market increased in the second half of 2012, as public markets rallied and funds made substantial distributions
  • The median of the highest bid per fund was 90% of NAV for buy-out funds in H2 2012, vs. 86% in H1 2012 and 85% in H2 2011
  • Family offices continued to be active sellers in order to redirect resources to other activities. Funds of funds, secondary funds and other institutional investors were also actively using the secondary market in order to rebalance their portfolio or to accelerate distributions
  • Secondary funds were more aggressive buyers than in the past, winning the vast majority of our deals.
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August, 2012

Elm Capital First Half 2012 Newsletter
  • Secondary prices remained stable in H1 2012 for buy-out funds, whereas we noticed an increase in pricing for venture  capital funds
  • The median high bid for buy-out funds was 86% of NAV vs. 85% in the previous period and 75% of NAV for venture capital funds vs. 70%
  • Family offices represented the largest category of sellers, in many cases seeking to reallocate assets to more liquid instruments and direct deals. Funds of funds were also using the secondary market  to rebalance portfolios or accelerate distributions
  • The majority of funds for sale were European funds, showing that some investors are reducing exposure within Europe
  • Funds of funds are increasing their allocation to secondaries contributing to creating a high price environment despite the economic slowdown
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September, 2011

Elm Capital First Half 2011 Newsletter
  • Secondary market prices continued to rise in H1 2011 due to higher valuation of underlying portfolios, buoyant stock markets and strong demand from buyers
  • Median discount to Net Asset Value (NAV) observed by Elm Capital for buy-out funds stood at 8% in H1 2011 compared to 10% for H1 2011 and 14% for Q2 2010
  • Similarly, median discounts for venture funds decreased, reaching 28% compared to 35% in H2 2010
  • Strong competition on the buy side and the need to deploy money on the secondary market have put pressure on target returns
  • We expect that the combination of recent market volatility with uncertainties on public deficits and GDP growth will lead to somewhat higher discounts
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February, 2011

Elm Capital Second Half 2010 Newsletter
  • Improved secondary market pricing and continued increase in transaction volume
  • Average secondary discount observed in the second half of 2010 for buyout funds was 10% of the latest reported net asset value (down from 14% in Q2)
  • Venture capital funds are trading at a wide range of prices in the secondary market, with an average discount observed in the second half of 2010 of approximately 35%
  • Strong demand exists for a wide variety of funds managed by prominent GPs, in addition to a continued demand for middle market and emerging market funds
  • Expectations are for secondary prices to stabilise or slightly rise from current levels as GPs harvest value in their portfolios, and for transaction volume to increase
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May, 2010

Elm Capital First Half 2010 Newsletter
  • Increased Q1 2010 pricing and volume further validate a sharp secondary market recovery
  • Average  discount for secondary market prices received by Elm Capital during the first quarter of 2010 was 17% of the latest reported net asset value (“NAV”)
  • Attractive opportunities exist to trade single fund positions at no discount to the latest reported NAV
  • Expectations are for further NAV increases, but also for a stabilisation in secondary market prices close to NAV for quality buy out funds
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