Private equity stakes traded globally on the secondary market hit a record USD 162 bn last year, up 45% y-o-y, the Financial Times reports, citing a review by investment bank Jefferies. The trend comes as investors exit PE funds in response to a protracted dryspell in new big-ticket acquisitions leads, while fund managers themselves are increasingly offloading stakes to new funds.

By the numbers: Volumes represent a 20% increase compared to the previous peak in 2021, when the pandemic triggered a global sell-off. Private capital firms also recorded a 44% y-o-y increase in asset sales at USD 75 bn in 2024, often using continuation vehicles — selling assets within the same firm.

The rationale: The move to the secondary market comes as funds are struggling to exit investments via IPOs or other transactions that offer appealing valuations, limiting their access to liquidity needed to pay fund backers, the FT said. Higher interest rates and lower consumer spending also increased pressures on PE funds, as a record number of private equity-backed firms in the US filed for bankruptcy last year, a study by S&P showed.

Trump era may alleviate some pressure: Antitrust regulations in the US and Europe in recent years have also limited M&A activity and made exits even harder. However, economists are predicting that President Trump’s second tenure promises a more business friendly regulatory environment.

Anticipation of Trump’s pro-business policies led investors to sell stakes at a smaller discount, 6% below net asset value, compared to 9% the year before, signalling confidence in an upcoming recovery of M&A activity that will facilitate exits, the FT reported.

MARKETS THIS MORNING-

It’s a calm morning as most Asian markets are closed for the Lunar New Year holiday, except for Japan’s Nikkei, up 0.6%. Meanwhile, Wall Street futures are unchanged as investors anticipate the Fed’s decisions on interest rates.

TASI

12,421

+0.4% (YTD: +3.2%)

MSCI Tadawul 30

1,544

+0.4% (YTD: +2.3%)

NomuC

31,023

0.0% (YTD: -1.4%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.0% repo

4.5% reverse repo

EGX30

29,647

-0.3% (YTD: -0.3%)

ADX

9,550

0% (YTD: +1.4%)

DFM

5,177

-0.3% (YTD: +0.4%)

S&P 500

6,064

+0.9% (YTD: +2.1%)

FTSE 100

8,534

+0.4% (YTD: +4.4%)

Euro Stoxx 50

5,196

+0.1% (YTD: +6.1%)

Brent crude

USD 77.49

+0.5%

Natural gas (Nymex)

USD 3.32

-4.3%

Gold

USD 2794.60

+1.0%

BTC

USD 101,293.60

-0.4% (YTD: +8.0%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.4% yesterday on turnover of SAR 9 bn. The index is up 3.2% YTD.

In the green: Jabal Omar (+7.5%), Almoosa (+6.9%) and Thimar (+6.5%).

In the red: Dar Alarkan (-5.4%), East Pipes (-5.4%) and Bawan (-4.1%).

THE CLOSING BELL: NOMU-

The NomuC was unchanged yesterday on turnover of SAR 36 mn. The index is down 1.4% YTD.

In the green: Mulkia (+7.8%), Sure (+7.8%) and Leen Alkhair (+7.2%).

In the red: Quara (-5.9%), Nbm (-4.1%) and Tharwah (-4.1%).

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