Chris Witkowsky
Some public pensions appear to think any sunlight allowed on their private equity decision-making processes would cause irreparable damage to their ability to continue investing in the asset class.
Secondaries pricing has become uncertain, with inflation, supply chain disruptions, geopolitical turmoil and rising interest rates causing public market volatility since the beginning of the year.
The portfolio sale, relatively small compared to the $1bn-plus transactions that hit the market since last year, is expected to get a lot of looks.
Custar joined placement agent and advisory firm M2O to launch its secondaries business in 2017.
The presence of a US public pension system as a lead investor is a reflection of the growing sophistication and desire on the part of some big US public plans to take more direct roles in investment management.
The mid-market-focused boutique is one of several banks and financial advisers thinking about adding secondaries capabilities.
Portfolios with valuations pegged to 30 September no longer reflect market dynamics, including public market volatility, plunging tech valuations and geopolitical turmoil sparked by Russia’s invasion of Ukraine.
While secondaries activity shows no signs of slowing, LPs and GPs need to get on the same page about how to smooth out this process for institutional investors going forward.
Large portfolio sales have taken up buyer interest in the second half, as many look to diversify beyond the concentrated bets they made earlier in the year.
GP-led secondaries, especially single-asset deals like Belron, have driven the market to what is expected to be record volume levels this year.
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