The Private Equity Secondaries Market During the Financial Crisis and the "Valuation Gap.".

The article describes the performance of the U.S. financial secondaries market during the 2008-09 financial crisis that led to its near-collapse in 2009. The market recovered quickly and showed no discernable lag, relative to that of the U.S. stock markets. It identifies the widening valuation gap as key metric of market illiquidity and analyzes the market behavior during the crisis through behavioral and accounting-based explanations. The article concludes that the resiliency of the secondaries market was proven during the crisis.