NYPPEX CEO Allen: Best and Worst Alternative Fund Strategies in a Recession

NEW YORK, Aug. 4, 2022 /PRNewswire/ — NYPPEX Holdings, one of the world’s leading providers of secondary private equity liquidity and data, today announced its projections for best and worst performing alternative fund strategies in an economic recession.

"If you expect a recession and want to rebalance your alternative fund portfolio to mitigate the damage, here are some lessons from the 2008 recession," stated Laurence Allen, CEO of NYPPEX.


All alternative fund strategies generated negative 1-year median returns in 2008


The 3 best performing alternative fund strategies generated median returns of approximately -6% to -11%:  

a.  Mezzanine
b.  Infrastructure
c.  Natural Resources


The 3 worst performing alternative fund strategies generated median returns of approximately -27% to -40%:

a.  Real Estate
b.  Distressed Debt
c.  Buyout


The 3 alternative fund strategies that generated the highest returns in the 2009 recovery

a.  Distressed Debt
b.  Distressed Private Equity
c.  Private Debt 

"Surprisingly in 2009, Real Estate, Infrastructure and Mezzanine continued to generate negative returns, while Private Equity, Buyout and Venture each generated positive returns – along with the strategies mentioned above," stated Allen.

This may be a good time to think about allocations to alternative fund strategies. 

Source: Median returns estimated by NYPPEX

About NYPPEX Holdings  

NYPPEX Holdings is one of the world’s leading providers of secondary liquidity and data services for interests in alternative funds. Its clients include alternative investment funds, financial institutions, endowments, foundations, institutional investors, family offices, private clients and their respective advisors worldwide.

Since 2004, the NYPPEX QMS™ has been formerly recognized by the U.S. Internal Revenue Service as a Qualified Matching Service for private partnerships though a private letter ruling under internal Revenue Code §1.7704. The NYPPEX QMS assists private equity funds meet the requirements of a QMS safe-harbor exemption under IRS §1.7704, which helps ensure regulatory compliance and avoid an adverse taxable event when permitting higher volumes of secondary interest transfers annually. 

Its private securities are privately offered to qualified investors through NYPPEX, LLC. NYPPEX is regulated in the U.S. by the SEC and FINRA.  Member FINRA, SPIC.

About Laurence G. Allen

Laurence Allen serves as the CEO of NYPPEX Holdings, LLC. Since 1999, he has been a pioneer in the development of secondary markets in private equity funds and private companies.

He has been a speaker at numerous private equity conferences worldwide, including the  Institutional Limited Partners Association Spring Conference (Miami), Super Return Middle East Conference (Abu Dhabi), Dow Jones Private Equity Outlook Conference (New York), World  Exchange Congress Conference (Barcelona), Private Company Stock Conference (Palo Alto), and Asian Venture Capital & Private Equity Conference (Hong Kong).  

Mr. Allen has served on numerous advisory boards including the Wharton School, Bowery Mission and the U.S. Congress Business Council. His diverse civic interests have included the  Metropolitan Museum of Art, Boys and Girls Club of Greenwich and Ducks Unlimited which  presented him a Lifetime Achievement Award.

Prior to founding NYPPEX, Mr. Allen served in various positions with Merrill Lynch where he helped pioneer the development of secondary markets for commercial and residential mortgages. At Bear Stearns, he helped develop the secondary markets for private debt placements.

Mr. Allen received a BS in Economics and MBA in Finance from the Wharton School at the University of Pennsylvania. 

Disclosure: This information is market commentary by NYPPEX and is not a solicitation of private securities transactions which may only be done through private offering documents and in jurisdictions where permitted. Investors should not rely on the information in this commentary as the basis for making investment decisions. This commentary is provided for informational purposes only. You are strongly encouraged to consult with your own independent advisors regarding any issues discussed in this commentary.    

Private placements are illiquid, speculative and investors may lose their entire investment.

For more information, please visit www.nyppex.com or contact inquiries@nyppex.com or by phone at +1 (914) 305 2825 in the United States, +41 43 508 7280 in Europe or +65 3158 1383 in Asia.

Media Contact:
Jeremy Kim