The pace of secondaries funds’ final closes slowed down in the first quarter compared to the same period a year ago, with five funds raising $1.3 billion, according to research by PEI’s Research and Analytics division.
In the first quarter of 2014, eight funds closed on $4.6 billion.
The drop is due to the funds closing during the first quarter being on the smaller side. The average size of funds closed in the first quarter this year was $260 million, compared to $575 million for the same period in 2014.
In the first quarter of 2015, PineBridge Investments closed its third secondaries fund, PineBridge Secondary Fund III, with $308 million, short of its $500 million target. In January, Zurich-based Akina closed its first secondaries fund with €224 million.
However, the trend was already being reversed at the beginning of the second quarter with New York-based Lexington Partners announcing it had closed the second largest secondaries fund ever raised.
In April, the firm held a final close on its eighth secondaries fund, Lexington Capital Partners VIII, with $10.1 billion, surpassing its $10 billion hard-cap.
“Secondaries are very much a niche market with a number of very small funds and a few elephants,” said Kelly DePonte, managing director with placement advisory firm Probitas Partners. “When those elephants have a large close, the quarterly numbers or even the annual fundraising totals can vary tremendously.”
In 2014, 32 secondaries funds closed on $32.52 billion, surpassing the 26 secondaries funds that closed on $21.65 billion in 2013.