Chris Witkowsky

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.

The challenges of selling such a big offering are highlighted by growing uncertainty around secondaries pricing, weakening amid public market volatility, rising inflation and geopolitical shocks from Russia’s invasion of Ukraine.

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.

Several recent single-asset secondaries deals have had their valuations set by earlier minority stake sales.

The sale is one of several that hit the market since the second half of 2021, when traditional LP portfolio sales came surging back into the market.

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.

The Duravant process is among a slew of single-asset processes to hit the market since last year, which is helping to drive total deal volume to record levels.

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.