Real estate, agri secondaries rose in 2015

Agri and timber secondaries saw the biggest growth in secondaries deal volume, rising by more than half in 2015, according to a report by Setter Capital.

Real estate, and agriculture and timber secondaries had the biggest growths in deal volume compared with other asset classes amid a plateau in total market volume, according to a report by Setter Capital.

Deal volume in real estate secondaries grew to $9.2 billion, a rise of just over a third compared with a year earlier, according to the placement agent’s 2015 Setter Capital Volume Report, released in February. Existing as well as new buyers increased their levels of deals, the report noted.

“Buyers continued to diversify their secondaries focus with about 17 percent of participants buying other alternative investment types for the first time,” such as real estate and infrastructure, the report noted.

Globally, there are five dedicated real estate secondaries funds in market targeting $2.3 billion in total, according to PEI’s Research and Analytics .

Agri and timber secondaries had the biggest growth with a 57 percent rise in transaction volume. The volume of stakes traded in the asset class is still small, with $313 million exchanged in 2015, accounting for 0.8 percent of total fund sales, according to the report.

Setter’s survey examined private equity, real estate, hedge funds, infrastructure and agriculture or timber strategies and found total secondaries market volume was little changed at $49.6 billion in 2015, a slight rise from $49.3 billion a year earlier.

Within private equity, energy fund secondaries saw the biggest drop, falling by about 52 percent to $826 million, as falling energy prices caused the bid-ask spread to widen. Private equity on the whole totalled $37.7 billion, a 0.5 percent decrease year on year.

Infrastructure secondaries also fell, by 16 percent tp $1.6 billion.

The report sought responses from the 117 most active and regular buyers on the secondaries market, with 85 agreeing to share their results.

Founded in 2006, Toronto-based Setter specialises in providing liquidity solutions for fund managers and institutional investors, according to its website.