CVC explored adding secondaries investment unit – exclusive

One of the world’s largest buyout shops has mulled a move into the secondaries market, Secondaries Investor has learned.

CVC Capital Partners, which has $82.4 billion of assets under management, has been in conversations with potential candidates about building a secondaries investment team, according to four sources familiar with the matter.

Discussions were ongoing as late as early this year, one of the sources said.

These plans have since been cancelled due to the coronavirus crisis, among other reasons, Secondaries Investor understands.

It is understood that CVC is one of several large alternatives managers to have explored building a secondaries investment unit.

There have been a number of buyside entrants into the secondaries market in recent years. In 2018, BlackRock hired Steve Lessar and Konnin Tam from Goldman Sachs Asset Management to co-lead a new secondaries unit. The firm is in market targeting $1.5 billion for its debut fund.

Last October, Canada’s largest insurer, Manulife, hired Jeff Hammer and Paul Sanabria, former co-heads of Houlihan Lokey‘s illiquid financial assets practice, to run a principal investing unit focused on secondaries, Secondaries Investor reported.

Veteran market participants have been predicting that more investment firms will add secondaries to their offerings.

“One of the few large remaining independent secondaries houses will be purchased by a large alternatives platform,” Glendower Capital managing partner Carlo Pirzio-Biroli told Secondaries Investor in January. “That’s driven by large platforms continuing to grow AUM and add business lines, and taking advantage of succession considerations that emerge occasionally with independent managers.”

Luxembourg-headquartered CVC is in market targeting €18 billion for its eighth buyout fund, according to PEI data.

CVC declined to comment.

– Adam Le contributed to this report.