Key insights
- The article discusses the potential overvaluation of private equity funds (VCX, DXYZ) that provide exposure to pre-IPO tech companies. The author questions whether current valuations, significantly above NAV, are sustainable or indicative of a SPAC-like bubble. This raises concerns about potential downside risk for investors entering at current levels, suggesting caution regarding these investments.
These are the latest funds which are giving exposure to private investment in some of the top tech companies. Since listing the valuation of these companies have gone much higher and so has the NAV for these.
If not 10x they have already gone above 4-5x their listing price and hence they are trading at 2 - 5 times of their NAV as well.
Is it worth investing in these at this time or this is another SPAC bubble. Is this going to sustain. I understand this is a new opportunity for investors who were not able to invest in these private companies earlier.
Also if we should, any thoughts on which one makes more sense.