The Ledger
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Madorsky: Actual PE fund lifespans stretch to 15 to 18 years
“It's not 10 years the life of a fund. It's not 12 years the life of the fund plus the two-year extensions. It's 15 to 18 years.”
Madorsky: Most secondary market volume is strategic, not distressed
“In today's world, the majority of the volume that we see is probably executed around portfolio construction. And there's a lot of reasons to sell. Sometimes managers are over allocated to private equity. Limited partners are over allocated to private equity. L…”
Madorsky: Lower middle market buyouts historically outperform other PE classes
“And we also have the benefit that lower middle market, using Prequen data, that's historically outperformed all the other sub-asset classes.”
Madorsky: AI will build initial PE financial models within three years
“In three years, certainly AI will be able to create a first or second run at our models. It might not be able to fine tune or drive a lot of the assumptions that we need the qualitative rich data that we're collecting, but to actually create and populate the E…”
Madorsky: Retail funds dominated large secondary portfolio purchases in 2024
“When we've seen a lot of the larger portfolios and even a lot of the limited partnership positions trade in 2024, the retail funds have been the main connoisseur of this product.”
Madorsky: Average PE portfolio company hold period now exceeds six years
“When we first started, the average assumption on a company being held in a portfolio was four and a half to five and a half years. I think today that same assumption is probably six years plus.”
Madorsky: Five or more of top 10 PE firms are secondary players
“In 2010, of the top 10 biggest private equity firms globally, one or two of them were secondary players. If you look at it today, it's a handful or more. Meaning, secondary players are raising much bigger funds.”
Madorsky: Leonard Green, Advent, and New Mountain are raising GP-led funds
“A couple of them have already announced that they're raising funds, whether that's Leonard Green, Advec, New Mountain, and then a couple are quietly poking into the background.”
Madorsky: PE secondary market volume grew from $20B to $180B since 2010
“When you look at the 2010 volume, it was right around twenty billion dollars. So let's mark our growth of the industry with the volume size... So twenty billion dollars, In 2010, a 170 or eighty billion dollars in 2024.”
Madorsky: GP-led deals reached half of secondary volume by 2020
“By 2020, about half the volume was GP-led transactions and half the volume was LP transactions. Juxtapose that versus 2010, it was all LP transactions.”
Madorsky: Yale and Harvard secondary sales are a return to market
“Although we see in the market that Yale and Harvard are selling, this is not their first sale. It's just actually a return to them selling.”
Madorsky: Expected 2025 secondary volume is around $190 billion
“Let's say in 2025 expected secondary volume is a hundred and ninety billion dollars, plus or minus.”
Madorsky: Secondary volume historically matches 1% to 1.5% of alternatives NAV
“Historically that Ratio, which has been the total volume over the total amount of NAV has been about one to one and a half percent.”
Madorsky: FASB 157 established mark-to-market accounting in private equity
“The other piece of it was that prior to 2007, There was not a mark-to-market valuation methodology universally adopted. The NAV, the value of the position, was the lower of cost or market. Lower of the cost of market. The FASB rule of one 57 drove to a more ma…”