Valuations: underperforming assets more likely to be overvalued
15.07.2024 – Articles
New research from TESS, Clipway’s Tech-Enabled Secondaries System, reveals GP reluctance to mark down underperforming assets.
Analysis of 600 unique funds and more than 8,000 underlying portfolio companies has found that higher performing assets tend to be valued conservatively, while underperforming companies are more likely to garner more aggressive valuations.
The research comes from secondaries player Clipway and its Tech-Enabled Secondaries System (TESS) – an investment monitoring tool that applies data science to large volumes of LP secondaries data.
Clipway’s latest report tested the correlation between valuation and operating performance of private equity companies assessed by TESS.