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Secondaries firms pay price for deals with high premiums

Secondaries investors have warned that commitments in private equity funds bought at the height of the market face writedowns of as much as two thirds.

Secondaries firms paid premiums of up to 50% for deals before the credit crisis, although 10% to 25% remained common. However, private equity funds have begun to trade at discounts of 50% and one secondaries firm is expecting discounts of between 60% and 80%.

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