Amy Carroll
GPs are looking to hold on to their prized assets for longer than ever, but repeated continuation vehicles are bound to invite questions from existing and prospective investors.
As traditional private equity houses enter the secondaries market en masse, more GPs are building up their capabilities to run ‘DIY’ continuation vehicle processes in-house.
Infrastructure secondaries are enjoying a surge in dealflow and limited competition thanks to significant barriers to entry, seven specialists tell affiliate title Infrastructure Investor.
Evergreen structures, sophisticated capital pacing models and the use of fund finance have all helped make private markets more accessible for an asset class that remains fundamentally illiquid.
LPs are turning to the secondaries market to address liquidity constraints amid improved pricing, as compelling supply/demand dynamics and structural innovations help fuel LP-led dealflow.
Despite a record year for fundraising, growth in the secondaries market has been hampered by a lack of liquid capital.
Money continues to flow into what many say is the most undercapitalised corner of private markets.
If they are not addressed appropriately, legal complexities such as tax issues can knock a deal off track.
Even with the best laid plans, GP-led processes can become delayed, but there are steps sponsors can take to mitigate common holdups.
Sponsors and management teams need to demonstrate their commitment to the next phase of growth.