FirstFT: Investors sell stakes in buyout funds at a record pace
Good morning. Investors are selling stakes in private equity and venture capital funds this year at the fastest pace on record, as the downturn in equities spreads to private markets that boomed thanks to low interest rates.
Pension and sovereign wealth funds were among sellers of $33bn worth of stakes in private funds in the first six months of 2022, up from $19bn in the same period in 2021, typically selling them below face value, according to Jefferies.
The sell-off follows a decade of surging allocations to private markets, which have grown since the financial crisis and cover buyout firms, venture capital and real estate funds.
The stake shedding also casts doubts on the ability of these groups to sustain the fundraising that has transformed them into a major force in global dealmaking.
Pension funds said the shift to ditch stakes was partly triggered by steep declines in stock markets, which left portfolios too exposed to buyout funds and other private investments whose value has not been marked down in the same way.
Happy Monday and thanks for reading FirstFT Europe/Africa — Jennifer
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4. Israel and Islamic Jihad announce Gaza truce Following three days of the worst violence in more than a year, Israel and Palestinian Islamic Jihad have agreed a ceasefire. The truce, which was brokered by Egyptian officials, was due to take effect at 23.30 local time last night.
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