Adams Street closes seventh secondaries programme including flagship – updated

Adams Street Partners has closed on its latest secondaries programme, having been out with its latest flagship for around two years.

The Chicago-headquartered firm has closed its flagship Adams Street Global Secondary Fund 7, according to a statement on the raise. Investors in the fund committed $1.33 billion, Jeff Akers, partner and head of secondary investments at Adams Street said in a statement provided to Secondaries Investor.

Fund 7 was launched in February 2021, according to Secondaries Investor data. Investors in the fund include Minnesota State Board of Investment and Ventura County Employees Retirement Association.

The overall programme secured more than $3.2 billion in capital commitments, the statement said. This includes amounts that have been or are expected to be invested in Adams Street-managed entities, including separately managed accounts and commingled vehicles, which will be deployed into secondaries transactions alongside the secondaries flagship.

“We are finding that investors increasingly seek secondary exposure through solutions designed to meet their specific investment objectives,” Akers said in the statement provided to Secondaries Investor.

The raise brings total secondaries strategy assets at Adams Street to $8.2 billion, the statement on the raise said.

“The aggregate fundraise exceeded our expectations and leaves the team well positioned to capitalise on our strategy in today’s evolving market,” Akers said in that statement.

Fund 7 is targeting a 15 percent net internal rate of return and a 1.5x multiple on invested capital, according to documents prepared by consultant NEPC for the Ventura County Employees’ Retirement Association‘s 26 September board of retirement meeting.

It charges 10 percent carried interest over a 7 percent hurdle rate, Secondaries Investor reported late last year.

The vehicle will invest in between 40 and 60 deals of around $20 million to $40 million each. As of late September, Fund 7 had made 19 investments with three additional deals pending. By transaction type, 57 percent of the fund had been invested in GP-led processes, with the remainder being invested in more diversified LP stake transactions, according to the documents.

Adams Street closed on $2 billion for its predecessor secondaries programme, with Adams Street Global Secondary Fund 6 receiving $1.05 billion in commitments, Secondaries Investor reported at the time.

In a September report, Akers said that as the secondaries market has matured, buyers have become more segmented, which has led to the emergence of even deeper inefficiencies in pockets of the market. The greatest inefficiency was in transactions of less than $200 million.

“A majority of the capital raised over the past several years has been in funds greater than $5 billion in size. Many of these are necessarily pursuing larger transactions that allow them to more efficiently deploy funds,” Akers said in the report. “We continue to believe that some of the most attractive transactions are in smaller funds with more variable valuation policies, and therefore feel that the inefficiencies that have emerged in transactions below $200 million are very compelling.”

– This report was updated to include additional statements from Jeff Akers, partner and head of secondary investments at Adams Street, including the size of Adams Street Global Secondaries Fund 7.