An increasing number of non-traditional sellers are actively looking to divest their alternative asset fund interests on the secondaries market, according to a report from advisory firm Setter Capital.
The report anticipates that a growing proportion of total secondaries sales in 2014 will involve sellers other than pension funds and banks, which have traditionally been the biggest sellers. During the first half of the year, a number of sophisticated LPs executed opportunistic sales, they had been contemplating for years.
Source: Setter Capital
Still, for full year 2014, Setter predicts pension funds and banks will remain the biggest secondaries sellers, accounting for 58.4 percent of all sales across asset classes. Other sellers, including family offices, funds of funds and hedge funds are predicted to account for a total of 41.6 percent of secondary sales.
Non-traditional sellers such as sovereign wealth funds and endowments are becoming more consistent players in the secondaries market on the buy-side and sell-side, as secondaries increasingly becomes an active tool for portfolio management, a spokesperson from Setter said.
In terms of directs, more manager-led transactions were taking place, Setter said. GPs were increasingly seen as sellers looking to restructure their funds.
Setter was unable to provide comparable data on secondaries sellers from 2013.