PE secondaries funds raise $2.3 billion in Q1

Four private equity secondaries funds held final closes in the first quarter of this year raising $3.5 billion, according data compiled by PEI Research & Analytics.

Newbury Equity Partners III, Portfolio Advisors Secondary Fund II, Azini III and Rosetta Capital Fund V all closed in the first quarter.

Connecticut-based secondaries specialist Newbury made a final close on $1.1 billion for its Fund III this week. It had a $1 billion hard-cap, similar to its Fund II, which raised a similar amount in 2010.

Portfolio Advisors, the US-headquartered fund of funds manager, closed its global Portfolio Advisors Secondaries Fund II (PASF II) with total commitments of $910 million in January. Its prior secondaries fund closed on $1.1 billion in 2009 and invested opportunistically across private equity, real estate and credit strategies.

Meanwhile two European direct secondaries funds closed: Azini Capital raised $100 million for its Fund III, while life sciences focused Rosetta Capital raised $200 million. Secondaries firm Lexington Partners was a major backer of both funds.

The figures do not include any interim closes for funds currently still in the market. A report from advisory firm Evercore estimated $30.2 billion of dry powder to be raised this year. Evercore interviewed 70 market participants excluding sovereign wealth funds, of which 33 buyers indicated they would be raising secondaries-focused capital.

In aggregate, the 33 buyers told Evercore that they had plans to raise $30.2 billion of new capital this year, and of the 33 respondents;

•  Seven respondents said they would target real estate.
•  Six respondents said they would target early secondaries.
•  Six respondents said they would target infrastructure secondaries.
•  Two said they would target credit secondaries.