Listed private equity: valuations are conservative, study finds

• Direct listed PE exits show 39% uplift on last reported valuation; fund of funds show 49% 

Brussels, Belgium, 31 October 2024 - Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, has released Listed Private Equity Insights: Validating Valuations, a new report setting out to substantiate asset valuation levels typically set by listed private equity managers.

• Analysis of the data for the five years from 2019-2023, which covers the COVID-19 period of market contraction and recovery, shows that listed private equity is generating significant uplifts over last reported asset valuations. For listed private equity firms investing directly in companies and other assets, the average exit uplift was 39% above the last reported valuation, while for listed private equity fund of funds, the average uplift was 49%. 

• Uplift by year demonstrates an expected rough alignment with public markets, as valuations are being based to some extent on comparisons with similar listed companies. However private equity valuations show less volatility indicating that private equity managers are more conservative, taking a more measured approach to writing assets down in a down market and in writing them up in a rising market.

The Listed Private Equity Valuations: Key Insights findings confirm that listed private equity firms typically exit investments at, or above, the carrying value at which they are reported in their financial statements, demonstrating that their asset valuations are prudent.

Eric de Montgolfier, CEO of Invest Europe, commented:

“Listed private equity is an important and growing segment of the private equity universe. Publicly available data on listed private equity asset valuations and exits shows that listed private equity valuations are conservative.”

Listed private equity is a growing segment of the market, offering investors, including individuals, the opportunity to invest in private equity managers or funds listed on global stock exchanges. As of December 2023, listed firms and funds managed €3.369 trillion in assets, with a combined market cap of €517.79 billion.

This segment includes major industry players, mid-market private equity and venture capital, both direct investors and fund of funds. Listed private equity companies provide an alternative way to invest in private equity, and one that is open to a wider range of investors providing flexibility and liquidity inherent in public markets. Listed private equity is subject to the same level of regulation and public disclosure as any other listed corporate structure.

Invest Europe’s Listed Private Capital Roundtable – which includes 22 firms - was formed in January 2023 following the integration of the former London-based LPeC (Listed Private Capital) group into the association.

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Invest Europe is the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors. We have over 650 members, split roughly equally between private equity, venture capital and limited partners – with some 110 associate members representing advisers to our ecosystem. Those members are based in 57 countries, including 42 in Europe, and manage 60% of the European private equity and venture capital industry’s €1.15 trillion of assets under management. Businesses with private capital investment employ 10.9 million people across Europe, 5% of the region’s workforce.