Pantheon International Participations (PIP), Pantheon’s listed fund of funds, committed £116 million ($172 million; €157 million) to 10 secondaries and three late primaries during the year ending 30 June, with a majority of commitments in large and mid-market buyout funds, according to the vehicle’s annual report.
Meanwhile, Pantheon screened more than $38 billion of potential secondaries opportunities and committed $322 million to 11 secondaries transactions, the majority of which involved purchases of individual fund stakes.
PIP often co-invests alongside Pantheon’s latest global secondaries fund, Pantheon Global Secondary Fund V, which is currently being raised, benefiting from access to larger secondaries opportunities that it would not have had the capacity to complete alone, according to the firm.
One of PIP’s secondaries transactions involved the purchase of two fund interests, one from 2005 and the other from 2007, as well as a primary commitment in a US mid-market buyout manager. The portfolio consists mainly of mid-market companies in the business services and healthcare sectors. PIP committed $14.2 million in March.
In January, it also purchased a single fund interest in a US fund focused on mid-market technology buyouts for $10.4 million. Pantheon was an existing investor in the fund at the time of the purchase.
Due to high pricing in the secondaries market, Pantheon has been focusing on situations where it can take advantage of existing manager relationships and where it has a good understanding of a fund’s particular characteristics rather than on attractive discounts, noted Tom Bartlam, chairman of PIP, in the firm’s end of the year report dated 30 September.
“Assets in the year have been more fully priced on the secondary market, reflecting an increase in the supply of capital targeted at secondaries particularly within the large 2006-2008 vintage pool as those funds become more mature and cash generative,” he said.
“Our strategy for buying secondaries has not depended in recent years on acquiring assets at high discounts to recorded value. Rather, we have invested in secondaries by taking advantage of our manager’s close knowledge of value potential within a fund relative to its stated net asset value and by maintaining a disciplined attachment to high-quality managers.”
Pantheon, which has $30.8 billion in assets under management, has acted as PIP’s manager since inception in 1997. PIP is listed on the London Stock Exchange.