Better Liquidity for Private Equity Funds

Private Equity Funds are formed with the combination of several high net worth individuals. PE Funds require vast amounts of around$250,000. The funds park their funds in good companies for decent returns over an extended period. They are considered illiquid because your funds are locked in for several years. You may ask ‘what is the way out for liquidity for private equity funds’. Companies use PE funds either for expansion to acquire a controlling stake in other companies. The only way to get funds for your needs is through selling a stake in that company. Accredited investors can offload their stake in that firm to another investor or fund. It becomes  secondary private equity and ensures liquidity.

Best private equity funds in 2019

Some private equity funds include Blackstone, Carlyle Partners VII, Traveller Capital Partners II, Dover Street IX, Headlands Capital Secondary Funds II, Cervin Ventures II Opportunities Fund, Ocean Avenue Funds III, Industry Ventures Partnership Holdings IV, Petershil Private Equity, Bain Capital Europe V, and American Securities Partners VIII.

The private equity funds buy a stake in some firms from other private equity funds. It ensures liquidity for private equity funds that intend to diversify or meet the redemption needs. However, it takes a long time to finalize the deal, and the drafts are to be completed by the legal experts.

Improve limited partner liquidity using a qualified matching service

The limited partners (LPs) that form the private equity fund face a challenge in balancing their portfolios. NASDAQ that provides alternative liquidity solutions supports LPs secondary transactions. We at NYPPEX private markets offer an end to end transaction cutting edge technology and qualified matching service for LPs ensuring smooth transfer process and cash settlement.

What is a qualified matching service?

If the limited partners indulge in frequent transfers in a fund, it is called a publicly traded partnership (PTP). The numerous transactions attract tax. Interests in the PTP can be traded either on a secondary market or an established securities market.

A facts and circumstances sheet is used by IRS to check whether partners are ready to sell or buy or swap the partnership interests in an economical and comparable manner for trading on securities market.

You can seek the help of qualified matching service offered by NYPPEX private markets to transfer up to 10% of the interests in your partnership during the taxable year.

Standards of qualified matching service under section 1.7704.1(g)

It should have a printed or computerized listing system to show the bids of customers or ask quotes allowing the matching partners to sell their interest to those, who are interested in buying such interests.

The selling partner has to wait until the 15^th calendar day to sign the binding agreement after a sale offer is made to a potential buyer. You can refer the centrally maintained record to verify the evidence.

You can do matching either comparing the list of sellers and buyers or through ask or bid process. You can reach NYPPEX private markets for more details in qualified matching service.