Investors tipped to sell out of $140bn worth of equity

Investors are likely to sell out of about $140bn (£91bn) worth of private
equity investments, or 10% of the market value, in the next 18 months, a buy-out
expert believes.

David de Weese, partner at buyout firm
Paul Capital, told the
Financial Times many would sustain losses by doing so, including
pension funds, endowments, banks and insurance companies which were motivated to
sell down their private equity portfolios at a time when their value was
falling, driven further down by the mark-to-market accountancy rules.

De Weese predicted ‘motivated sellers’ would quit $130bn to $140bn worth of
equity investments in the US and EU over next 18-24 months.

Other industry analysts foresee a higher figure. Private equity sellers have
in the last months gained only about 50 cents in the dollar on the value of
their investments, according to a report by investment bank
, commpared with more than $1 last year and 84 cents in the first
half of this year.

Further reading:

‘Fair value is not fair’

the Financial Times story

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