Data shows PE has turned a corner, but sentiment yet to catch on
Data shows that global private equity (PE) is on the rebound, yet sentiment hasn’t caught up and good discounts are still available, according to Adam Myers, Executive Director at Pengana Capital Group, manager of Australia’s only globally diversified PE vehicle listed on the ASX, the Pengana Private Equity Trust (ASX: PE1).
In the US, the world’s largest and most influential PE market, aggregate announced and estimated deal count and total deal value were up by over 8 and 28% YoY respectively in the first half of 2025 compared to the same period last year, according to data from Pitchbook.
Myers said private equity has historically outperformed listed markets because it often provides access to businesses at more attractive valuations, along with opportunities for operational value creation. “PE investments have typically traded at a 20–30% discount to public comparables, and with listed markets now running hot, that gap may be even wider, especially in the middle market where most PE deal volume is concentrated.
“In addition to strong growth potential, private equity offers meaningful diversification and tends to exhibit lower volatility than listed equities.”
According to Myers, the middle market remains active, particularly in secondaries and co-investments. “Exit risk is lower in this segment, as most realisations occur through trade sales or sponsor-to-sponsor deals rather than IPOs, which is especially valuable in more volatile public markets.”
Myers also said distributions, which are often cited as a key health indicator for private equity portfolios, are also trending upwards. Chicago-based GCM Grosvenor, one of the world’s most experienced private markets investors, and manager of PE1’s portfolio, saw its private equity portfolios deliver aggregate distributions that were more than 50% higher in the first half of 2025 versus the same period in 2024, and 60% higher year-on-year as of 30 June.*
PE1 recently completed the sale of six fund stakes that were purchased in the secondary market at 98% of NAV. The cash realised from these transactions is now being deployed into a permanent on-market buyback programme, a directly accretive strategy aimed at narrowing the trust’s discount to NAV and enhancing investor outcomes. “The buyback programme is already having an impact”, Myers said.
“The discount to NAV has narrowed by approximately 10 percentage points since we commenced in early July. The current discount remains around 20%, which presents ongoing value for investors.
“This is not a one-off. We’re committed to the buyback mechanism for the long term, with clear parameters and full transparency. As the strategy continues, we expect to see the discount compress further.”
PE1’s NAV return for the year to 30 June 2025 was 9.5%, with an annualised return since inception in 2019 of 8.9%. Unusually for a private equity vehicle, PE1 pays an ongoing distribution yield of 4% p.a. on NAV, which equates to approximately 5.2% p.a. at current market prices. As NAV rises, so too does the dollar value of income paid to investors—providing a rare case of being “paid to wait” for the discount to close.
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