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ADIA deal postponement highlights market dislocation

The sovereign wealth fund giant had received interest from firms including Ardian over the sale of a portfolio potentially worth more than $2bn.

Abu Dhabi Investment Authority‘s postponement of the sale of a large portfolio of private fund stakes highlights the difficulty of getting deals done in the coronavirus crisis-driven market downturn.

The sovereign wealth fund has decided to hold off on offloading a portfolio that could be worth more than $2 billion in net asset value, according to two sources familiar with the matter.

Buyers including Ardian are understood to have been looking at the deal.

Secondaries Investor revealed in September that ADIA could sell as much as $4 billion of stakes as part of the process run by Park Hill. The stakes were mainly private equity and funds of funds.

Bloomberg first reported that ADIA had decided to hold off on the sale.

Difficulty agreeing on a price due to volatility in net asset values brought about by the coronavirus-related shutdown was a reason for the postponement, the sources said. Ardian was also trying to negotiate greater downside protection on the sale of the portfolio which has significant exposure to Asia, according to one of the sources.

The portfolio was understood to include China-focused funds managed by CDH Investments and Vision Knight Capital, as well as The Carlyle Group and Bain Capital Asian pan-regional funds.

The secondaries market has been more-or-less closed since the start of March and is likely to remain so until second-quarter valuations filter through at the end of June, Secondaries Investor reported.

Still, some deals agreed on prior to the crisis have closed, including Canada Pension Plan Investment Board’s sale of $1 billion-plus worth of stakes to Ardian and Lexington Partners in March. On Tuesday, London-headquartered advisor Elm Capital said it had closed two GP-led deals and two LP portfolio sales during the first quarter.

ADIA and Park Hill declined to comment. Ardian did not return a request for comment.