Private equity valuations normalise after years of inflated marks, TCU CIO says
Private equity managers are becoming more willing to reduce portfolio valuations following several years of inflated asset marks, as pressure to return capital to investors increases, according to a report by Bloomberg.
Private equity valuations are gradually returning to more realistic levels after years of being inflated, according to a report by Bloomberg and insights from Jason Safran, the chief investment officer of Texas Christian University’s $3 billion endowment. Speaking at the Bloomberg Invest Dallas conference, Safran noted that private equity portfolios had been significantly overvalued between 2022 and 2024. However, he emphasized that valuations are now becoming more reflective of market realities.
The report highlights that growing investor impatience is driving portfolio managers to accept exits at lower valuations or transfer assets into continuation vehicles. This reflects the pressure to generate liquidity from aging portfolios. Olivia Newell, the managing director and head of Texas at Partners Capital, echoed this sentiment, stating that some managers have adopted more conservative valuation practices.
They are now opting to mark assets cautiously, rather than taking the risk of realizing losses at the time of exit.
These developments are occurring as private equity firms continue to manage investments acquired at elevated valuations during a period of low-interest rates.
Written by urgent.news from Private Equity Wire's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
