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"Private equity is evolving as
an asset class. With secondary market liquidity, its risk/return profile improves
and future market demand for private equity assets worldwide is likely to increase
significantly."
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Dear Friend,
Against the backdrop of a deleveraging economy and the temporary contraction of
asset valuation multiples, private equity is evolving as an asset class. The addition
of secondary private market liquidity, the ability to manage risk through periodic
portfolio rebalancing and increased transparency due to independent data and research;
is likely to result in greater future market demand worldwide for private equity
assets due to an improved risk/return profile.
Whether you are (a) a general partner seeking exits from holdings of unregistered
securities in private companies or to transfer defaulted commitments to new limited
partners, (b) an institutional investor seeking to rebalance portfolios holding
interests in venture, buyout, real estate or hedge funds, (c) a government regulator
or auditor seeking independent fair value estimates, (d) a corporate CEO
seeking to divest strategic investments or to arrange liquidity for restricted shareholders
or (e) a private wealth management advisor seeking bid indications, liquidity,
research or data for private equity funds to provide proprietary financial services
to ultra high net worth private clients…NYPPEX can help achieve your objectives
in alternative assets.
Since 1998, our unique combination of specialized professionals, trading, research,
data, distribution channels to a large pool of global private market liquidity and
our technology-based NYPPEX IPL Private Trading System offer an unmatched capability
to solve a wide variety of client objectives.
For 2009, we expect secondary transaction volume for the industry to increase approximately
68% to $27 billion for interests in private partnerships, and approximately 75%
to $10 billion for unregistered securities in private companies as compared to 2008.
However, the real challenge is to find solutions for the $120 billion of private
equity assets we estimate will be offered for secondary sale in 2009 and 2010.
Among the reasons that pending secondary private equity transactions are not approved
by general partners is due to the 2% annual transfer limit for private partnerships
under Treasury Regulation 1.7704. The NYPPEX Qualified Matching Service (“QMS”),
as formally recognized in 2004 by the Internal Revenue Service private letter ruling
to NYPPEX (PLR-111165-04), provides a QMS safe harbor exemption for private partnerships
to annually permit interest transfers for up to 10% of a private partnership’s capital
commitments. The NYPPEX QMS is an example of our proprietary solutions available
to both general partners and limited partners.
However, what matters most, is that the NYPPEX brand stands for trust and credibility
to our clients.
Sincerely,
Laurence G. Allen
Managing Member
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