Majority of secondaries firms have sold on secondaries market

Secondaries firms are using the very market from which they buy stakes to dispose of interests, according to a survey by global advisory firm Campbell Lutyens.

The firm surveyed top 30 specialist secondaries investors with the largest latest fund sizes and found 73 percent had sold stakes in recent years. A fifth of those surveyed were regular sellers, with some conducting multiple sales in a single year.

Of those who sold their assets, 86 percent of these have offloaded assets from their secondaries programmes.

“In many ways, the best testament to the secondaries market is to have the secondaries funds themselves using this market because they think it’s efficient,” Thomas Liaudet, a partner at Campbell Lutyens in London, told Secondaries Investor. “It shows that the market continues to become more and more sophisticated and have more depth.”

The types of assets sold mainly included US and European fund stakes, as well as some emerging markets-focused funds, according to the survey.

Key drivers for these sales include a high pricing environment in which sellers can offload stakes at smaller discounts than they acquired them for, and wanting to monetise interests in funds to give returns back to limited partners, Liaudet said.

The number of regular sellers is expected to increase, according to the report.

“It is anticipated that this ‘tertiary market’ will continue to grow as specialist secondary investors raise more and larger funds,” the report noted. “Inevitably, those programmes will continue to face requirements to address the maturing nature of their portfolios by offering accelerated liquidity to their own investors.”