Earlier this week, early full-year data confirmed what many had suspected; in 2021, transaction volume surpassed $100 billion for the first time. At the same time, 2021 cruised into a comfortable but distant second place for fundraising, $35 billion shy of the prior year’s all-time record, according to Secondaries Investor data.

Last year $63.8 billion was raised across 77 funds. This compares with $98.8 billion across 63 funds in 2020 and $32.7 billion across 44 funds in 2019.

Funds represented in this year’s haul include Coller Capital’s $9 billion Coller International Partners VIII, LGT Capital Partners’ $4.5 billion Crown Global Secondaries V, and Hamilton Lane’s $3.9 billion Hamilton Lane Secondary Fund V. Coller is in the market now with its first credit secondaries fund and Hamilton Lane is already back in the market with its sixth flagship secondaries programme.

At first glance, the fundraising total for 2021 seems like a significant fall off from the year before. However, were it not for the presence of two mammoth funds in 2020, the numbers would be similar. Ardian’s ASF VIII programme and Lexington PartnersLexington Capital Partners IX accounted for $33 billion of capital raised that year. With new monster funds in the works from Lexington, Blackstone and others, next year already has a head start.

The success of these mammoths, their absence felt so clearly when they are not pitching in with fund closes, belies the fact that the middle and bottom end of the market – including other asset classes, such as infrastructure, credit and venture capital – are growing.

Seventy-seven is the most secondaries funds ever to close in a single year. The last time more than 70 funds closed in one year was 2017, when 71 did so. Of the funds that closed in 2021, more than two-thirds, 67 percent, raised less than $1 billion.

“The secondary market is investing every dollar it raises very quickly,” said M2O Private Fund Advisors’ head of secondaries Mike Custar. “There’s going to be this constant pressure of ‘do we have enough capital out there?’”

As seen in the numbers, more funds are trying to step into secondaries than ever before and succeeding in doing so. However, as capital remains scarce – the $190 billion of available dry powder is less than two years’ supply – even more players, of all different sizes, will need to step up to keep the show on the road.

Contact the author at michael.b@peimedia.com