Why Axiom hasn’t backed GP restructurings

Axiom Asia invests about 20% of its fund of funds in secondaries and co-investments but hasn’t seen any GP restructuring deals attractive enough to pursue, says head of secondaries Alex Sao-Wei Lee.

What type of secondaries transactions does Axiom typically invest in? 

In recent years, we have made over $200 million of secondary investments. We have bought limited partner fund stakes and we have completed direct secondaries deals that involved spin-outs from banks. Although the majority of people who look at direct secondaries in Asia are more traditional secondaries funds, we have the distinction of being an Asian primary fund of funds that has a targeted approach to secondaries and a partner focusing on secondaries. We invest about 20 percent of our fund of funds in secondaries and co-investments.

How come the firm hasn’t done any GP restructuring work?

We are open to considering GP restructurings but thus far we haven’t seen any transactions that we found attractive enough for us to participate in. There aren’t a lot of GP restructurings in Asia — they would account for less than 10 percent of all secondary transactions. Historically, approximately one third of the secondaries market volume has come from directs. Those deals can be very large, although they are few in number.

Is there a particular region in Asia where you’ve seen more secondaries activity?

All of the assets we invest in are in Asia, including Australia, China, India, Japan, Korea and Southeast Asia. Secondary deal volume by region is proportional to the amount of funds raised by region. No single region stands out more than the others and it doesn’t matter where the secondary seller is based, as long as the assets are in Asia.