In an article published in Financial Investigator on 15 July, 2025, Frederic Blanc-Brude, Director at Scientific Infra & Private Assets (SIPA), Evan Clark, Senior Private Market Analyst at EDHEC Infra & Private Assets (EIPA), and Srinivasan Selvam, Senior Researcher at EDHEC Infra & Private Assets (EIPA), present the key findings from their recent study entitled “Market Risk in Private Equities”, which concludes that the prices of most private equities can be explained by systematic risk factors and bid-ask spreads:

“Simply put, there is a market for the equity stakes of private companies in which various investors are both buyers and sellers. As in any other market, the price of these stakes fluctuates with supply and demand. Changes in supply may be driven by economic or technological trends in the economy. For instance, there are more data centre companies today than there were ten years ago. Likewise, the level of demand for investing in private companies is the reflection of the number of buyers and their risk appetite at one point in time. The past decades have seen an increase in the number of private equity investors (both GPs and LPs) and significant variance of their risk appetite or the level of expected returns from private equities, as we document in our paper. This is why understanding market risk is crucial for investors as it helps them assess the volatility and potential returns of their investments in private equity funds.”

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