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The secondaries market has seen an uptick in capital raised year-on-year, with private equity strategies again dominating fundraising.
Capital raised in final closes for secondaries strategies across all asset classes between January and June rose to $37.2 billion, according to Secondaries Investor data. This marks a 29 percent jump on the same period last year and is roughly in line with the amount raised in H1 2021.
The total amount raised during the period eclipses all of 2019 when just $36.9 billion raised.
Capital is going into fewer hands, with 16 vehicles taking all the capital in the first half of the year. In full calendar year 2022, a total of 61 funds held final close, and 86 the year prior. This dynamic reflects the wider fundraising market: in private equity, the number of vehicles to hold a final close dropped by nearly 50 percent year-on-year in the first half, according affiliate title Private Equity International.
First half fundraising was buoyed by Strategic Partners‘ $22.2 billion raise for its Fund IX, which is the largest dedicated secondaries fund ever raised and which predominantly focuses on LP portfolios – an area that some predict will drive most of the overall secondaries market’s growth.
“We’re going through a period right now where for the first time in quite some time, there are some discounts available in the LP side [of the market]. That’s getting people excited,” said a director within the private capital advisory group at a boutique investment bank. Whereas the pendulum may swing between growth in the LP market and GP-led markets, the factors driving growth in the latter are structurally different to those in the LP market, the director said.
“If you think of the genesis of the secondary market being about having a liquidity mechanism for investors in private markets, they’re not locked in for 15 years with no recourse whatsoever.”