Hey Kevin, for transactions check out Hiive (hiivemarkets.com). FYI, Secondmarket does not exist anymore and CartaX (Carta's private stock brokerage business) doesn't either. Today the leaders are Forge and Hiive.
Why isn’t there a real-time benchmark for funds: This is a feature not a bug. Cliff Asness has written a lot about how private equity and venture capital perform volatility laundering by reporting quarterly and not marking portfolios down to public market estimates.
Same rationale applies for the challenges of private market liquidity: I (the PE/VC firm) would only want liquidity when I want to exit, and I wouldn't want to mark my portfolio to market during times of stress. This game of asymmetric info will have bad outcomes for the investors willing to purchase private market secondary shares in companies. It's worth noting that there is a market for LP secondary stakes in PE/VC; the VC stakes traded at a 30% discount to NAV in 2022.
Agree that it's not in the benefit of PE and VC to have a real-time benchmark exist. Cambridge Associates (https://www.cambridgeassociates.com/private-investment-benchmarks/) is the most common provider of benchmark data and mainly used by funds when they are fundraising. They have a give to get model of self reported returns. Also, I didn't know about the LP stakes being traded at a 30% discount last year, very interesting. I'd be curious what this looks like over the last 10 years.
Hey Kevin, for transactions check out Hiive (hiivemarkets.com). FYI, Secondmarket does not exist anymore and CartaX (Carta's private stock brokerage business) doesn't either. Today the leaders are Forge and Hiive.
Why isn’t there a real-time benchmark for funds: This is a feature not a bug. Cliff Asness has written a lot about how private equity and venture capital perform volatility laundering by reporting quarterly and not marking portfolios down to public market estimates.
Same rationale applies for the challenges of private market liquidity: I (the PE/VC firm) would only want liquidity when I want to exit, and I wouldn't want to mark my portfolio to market during times of stress. This game of asymmetric info will have bad outcomes for the investors willing to purchase private market secondary shares in companies. It's worth noting that there is a market for LP secondary stakes in PE/VC; the VC stakes traded at a 30% discount to NAV in 2022.
Agree that it's not in the benefit of PE and VC to have a real-time benchmark exist. Cambridge Associates (https://www.cambridgeassociates.com/private-investment-benchmarks/) is the most common provider of benchmark data and mainly used by funds when they are fundraising. They have a give to get model of self reported returns. Also, I didn't know about the LP stakes being traded at a 30% discount last year, very interesting. I'd be curious what this looks like over the last 10 years.
This Jefferies writeup shows historical VC LP secondary sale discounts on page 5: https://www.jefferies.com/CMSFiles/Jefferies.com/files/IBBlast/Jefferies-Global_Secondary_Market_Review-January_2023.pdf
Private equity wise, this paper outlines historical LP secondary sale discounts: https://bpb-us-w2.wpmucdn.com/u.osu.edu/dist/8/7843/files/2019/05/NSVW-JFE-Version-2019.pdf