Dry Powder: The Private Equity Podcast The Evolution of the Secondaries Market: From Crisis to Opportunity
11 snips
Jan 23, 2024 The podcast discusses the liquidity crisis in secondaries markets and how it could be an opportunity. It explores the surge of interest in the NASDAQ private market due to challenging fundraising environment and significant discounts in secondary markets. It also delves into the obstacles to liquidity in private markets including valuation issues and contractual terms. The lack of transaction data and benchmarks in private markets is discussed along with the potential for future liquidity and regulatory adaptation.
AI Snips
Chapters
Transcript
Episode notes
Regulatory Change Extended Private Lifecycles
- The JOBS Act and longer private company lifecycles created demand for private liquidity solutions like tenders.
- NASDAQ Private Market launched tenders to let employees monetize a portion of vested equity before IPO.
Use Tenders To Retain Employees
- Offer employee tenders so staff can monetize small percentages of vested equity and improve retention.
- Run structured, periodic liquidity events rather than leaving employees completely illiquid until IPO.
Valuation Hangover Created Trapped Capital
- A massive valuation run-up in 2020-21 created a large, trapped pool of capital after the reset.
- With IPOs and M&A muted, investors and employees face significant liquidity shortfalls today.