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FirstFT: Investors sell stakes in buyout funds at a record pace

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Good morning. Investors are selling holdings in private equity and venture capital funds this year at the fastest rate on record as the downturn in equities spreads to private markets booming on low interest rates.

Retirement and sovereign wealth funds were among the sellers of $33 billion worth of holdings in private funds in the first six months of 2022, up from $19 billion over the same period in 2021, and typically sold below face value, Jefferies said.

The sell-off follows a decade of rising allocations to private markets, which have grown since the financial crisis and involve buyout companies, venture capital and real estate funds.

The loss of stakes also casts doubt 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 dumping stakes was driven in part by sharp declines in stock markets, which left portfolios too exposed to buyout funds and other private investments that have not been devalued in the same way.

Column Chart of Fund Bet Sales ($ Billion) with Private Market Selling

Happy Monday and thanks for reading FirstFT Europe/Africa — Jennifer

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