ICG on track to raise largest-ever GP-led secondaries fund

Strategic Equity V is already larger than its $5.3bn predecessor, according to chief investment officer and chief executive Beno​ît Durteste.

ICG, the 12th-largest secondaries firm by fundraising per the SI 50, looks set to raise its largest-ever GP-led-focused fund when it holds its final close.

The London-listed manager’s Strategic Equity unit has already raised more capital for its Strategic Equity V fund than the size of its predecessor and is still in fundraising mode, chief investment officer and chief executive Beno​ît Durteste said on the firm’s full-year earnings call for the period ending 31 March on Tuesday.

Fund V has a $6 billion target and launched in November 2022, according to Secondaries Investor data. Predecessor Fund IV closed on $5.3 billion in May 2022.

The firm raised $3.5 billion for Fund V during the year to 31 March, according to results materials presented alongside the earnings call.

If it hits its $6 billion target, Fund V would be the largest dedicated fund focusing on single-asset continuation vehicle opportunities, per Secondaries Investor data.

Firms including Blackstone Strategic Partners, AlpInvest Partners and LGT Capital Partners have launched dedicated single-asset strategy funds in recent years. Last week, Lexington Partners said it had launched such a strategy and hired former ICG Strategic Equity founding member Christophe Browne to lead the effort.

ICG also plans to launch an evergreen fund this year which will invest via secondaries, Durteste said. ICG Core Private Equity will be an “institutional-quality evergreen” product and will offer US wealth investors “differentiated access to private equity through the secondary market”, he said.

The timing of Core PE’s first close is uncertain and could be in the next financial year, he added.

Firms including Partners Group, Coller Capital, HarbourVest Partners and Pantheon have launched evergreen private wealth products over the past year.

Private capital semi-liquid or evergreen vehicles can be offered to a broader swathe of investors than a traditional closed-end fund by catering to those that require the ability to withdraw their money. This process often involves partial exposure to cash or a cashflow-generating asset class such as secondaries, which enables them to offer regular subscriptions and redemptions.

HarbourVest’s product, for example, is a tie-up with Swedish pension fund AP7 and will invest via secondaries and co-investments, affiliate title Private Equity International reported.

ICG plans to leverage market demand for LP secondaries with the launch of Core Private Equity, Durteste said.

“That’s what we’re leveraging and we’re finding that there is reasonably strong demand, which is why we’ve been quite successful with LP secondaries, which I think is a product that works well and why Core, which is the evergreen version of that… will likely resonate as well,” he said.

The firm’s debut LP secondaries fund, ICG LP Secondaries Fund I, raised $1 billion in a final close in March, Secondaries Investor reported. There is “no reason why this strategy couldn’t reach $10 billion or more per vintage at some point”, Durteste said.

ICG had its second-largest year of fundraising, with $13 billion raised. Of this, 11 percent came from the wealth channel, Durteste said. The firm plans to raise at least $55 billion over the next four years.