Can anyone explain how the J-Curve relates to FoF investment in secondary PE partnerships.
Secondary partnership investments just have a shorter time until gains are realized? Is that all there is to it?
Would this enhance the annualized returns? The price of the initial partner is sold at a current market price, so are the returns of original investors and a secondary investor who buys-in in later years comparable?
Does anyone know if FoF investments are mostly from the secondaries or mostly not? Certain funds focus on secondaries vs. other dont?
There are FOF that focus on secondaries, but many don't. The secondary PE market is pretty illiquid and can be tough to value.
Remember that when you're buying into a FOF, you're buying into not just a j-curve, but a basket of j-curves that add up to the FOF's j-curve. With a secondary FOF, you'll start paying out capital calls and receiving distributions a lot faster because some of those funds it holds will have already started to come out of the j-curve when it opens.
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