Chris Witkowsky
As some GPs attempt to codify the removal of LPAC review and consent for continuation vehicles, they will face a ream of objections among investors.
There is an expectation that tender activity will increase as GPs look for ways to deliver liquidity back to LPs as exits slow, and at the same time boost fundraising in the sluggish environment.
Pricing of assets and LP stakes remain points of contention between buyers and sellers, which has made it challenging for secondaries deals to reach final close.
LP portfolio sales took the majority of total secondaries market share last year in a reversal from 2021.
Tender offers plus staples remain challenging because if the price isn't right, limited partners can simply choose not to sell.
The LP portfolio sale was among a slew of such deals launched since last year that managed to close despite pricing uncertainty and hesitation among LPs to sell at discounts.
Secondaries buyers estimate there is around $14bn to $16bn or more of LP portfolio sales on the block, with anticipation of much more to come.
Inventory flowing into the market is expected to drive volume beyond the estimated $103bn total for 2022.
The deal is one of the higher profile GP-led secondaries to emerge from the slowdown in activity in the second half of 2022.
Market professionals anticipate 2023 will be a record year as pent-up demand bursts through pricing hesitation and stored-up dry powder is unleashed.
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