Hollyport Capital, the tail-end specialist, has raised just over $2.2 billion for its latest flagship fund and its inaugural dedicated co-investment vehicle, despite the fundraising slowdown.
Hollyport Secondary Opportunities VIII, which was in market for one year, closed above its $1.5 billion target on over $2 billion, the firm’s head of investor relations, Catherine Badour, told Secondaries Investor.
The raise included Hollyport Secondary (Overage Fund), an overflow vehicle that will co-invest alongside the flagship in investments that exceed the concentration limits of the flagship fund. That vehicle closed on $155 million.
The fund saw a expanded investor base from LPs in the Middle East, joining commitments from institutions Europe and the US, Hollyport’s managing partner John Carter said.
Fund VIII continues with the strategy of acquiring mature portfolios of private funds stakes, the average age being 14 years, across a two-to-three-year investment period. Complex secondaries and GP-led deals will account for 20-30 percent of Fund VIII’s investments. The vehicle was just over 15 percent invested at the end of the third quarter and the firm expects to close on a number of transactions this quarter, Carter said.
London-headquartered Hollyport rose an impressive 11 places to 26th in this year’s SI 50 ranking. The firm has roughly doubled, or more than doubled, the size of each successive fund since it raised its debut £6 million ($7.4 million; €7 million), 2007-vintage vehicle.
Commenting on the fundraise, Carter said: “The investor base that invests in secondary funds is becoming more sophisticated. A lot of investors have a very clear secondary strategy, they’ve made commitments to various funds over a number of cycles, and therefore it’s important to differentiate yourself.”
“What has helped in our fundraise… has been the fact that we have a very clear, differentiated strategy within the secondary market,” Carter added. “It’s that clear strategy, and the fact that it delivers very consistent, attractive returns, that has enabled us to raise a billion [dollars] of new money.”
Since its predecessor flagship’s raise, the firm has more than doubled its headcount to 46 from 21 people. The firm promoted three staff members to partner in September, bringing the total number of partners to eight. The round saw Badour, Hollyport’s head of finance Mei Chan, and James Jupp, who launched Hollyport’s New York office in 2018, and its now based in London, all tapped to take up the senior title.
Secondaries firms have felt the fundraising pinch alongside their private equity peers this year. Private equity secondaries fundraising in the first three quarters of this year fell to $24.2 billion, according to Secondaries Investor data, marking a 49 percent drop compared with the same period last year, when such funds raised a record $47 billion.
The picture may change in the coming year: 56 percent of LPs plan to find the cash to commit to private equity secondaries funds over the next 12 months – the highest proportion of respondents to express their interest in the strategy since 2019, results from affiliate title’s Private Equity International’s LP Perspectives 2023 Study show.
Updated to clarify intended allocation for complex and secondaries and GP-led deals