Sam kept pushing for the CV endgame. Isn’t the CV endgame just a “time” add until lower interest rates to refill the liquidity punch bowl and keep the party going with higher valuations and more exits? But, if interest rates higher -> party is ruined and Evergreen and CVs become sober, ugly discounted CEFs?
CVs, while they present a host of conflicts of interest, are still a small fraction of the market..
And personally, I agree: I think the end game for many secondaries funds (ones that hold both LP-led and GP-led secondaries) will be listed CEFs (likely trading at a discount). I simply don’t see a way for a secondaries evergreen fund to meet a prolonged period of redemption requests. BPRE is a good example.
Another excellent post.
Sam kept pushing for the CV endgame. Isn’t the CV endgame just a “time” add until lower interest rates to refill the liquidity punch bowl and keep the party going with higher valuations and more exits? But, if interest rates higher -> party is ruined and Evergreen and CVs become sober, ugly discounted CEFs?
CVs, while they present a host of conflicts of interest, are still a small fraction of the market..
And personally, I agree: I think the end game for many secondaries funds (ones that hold both LP-led and GP-led secondaries) will be listed CEFs (likely trading at a discount). I simply don’t see a way for a secondaries evergreen fund to meet a prolonged period of redemption requests. BPRE is a good example.
Great post. Thanks for sharing.
Unlike defense spending or social programs that Congress can theoretically cut, interest must be paid or the government defaults.