This year was the strongest on record for secondaries fundraising by some distance, despite the disruption caused by the pandemic.
Funds that held final closes during the first three quarters of the year raised $59.7 billion, exceeding all full-year tallies on record, according to Secondaries Investor data. The fourth quarter has seen closes from firms such as Goldman Sachs Asset Management, HarbourVest Partners and AlpInvest Partners, adding more than $25 billion to the total.
Here are the top five fund closes of the year by size:
In June, Ardian completed fundraising for the largest pool of capital yet raised for secondaries. It is the fourth-largest for any private equity strategy after Blackstone Capital Partners VIII, CVC Capital Partners VIII and Apollo Investment Fund IX.
The Paris-headquartered alternatives manager collected $14 billion for Ardian Secondary Fund VIII and $5 billion for co-investments from limited partners such as the California State Teachers’ Retirement System, Florida Retirement System Trust Fund, Cathay Life Insurance, Fubon Life Insurance and State of Michigan Retirement Systems.
“I think [covid-19] could raise opportunities,” head of Ardian UK Olivier Decannière told Secondaries Investor in June. “[Large institutions] may come mainly to re-balance maturing portfolios or because they anticipate a degree of crisis…Having dry powder and such a large, global platform – if there is an opportunity we’ll take it.”
Lexington Partners matched Ardian’s standalone fund dollar-for-dollar. Lexington Capital Partners IX raised $14 billion by final close in January from LPs such as Minnesota State Board of Investment, New York City Board of Education Retirement System and Public School and Education Employee Retirement Systems of Missouri.
LCP IX invests across private equity and other alternative strategies, including direct investments, equity co-investments and hedge fund private equity strategies, as well as GP-led deals.
Among the deals LCP IX is understood to have backed are the acquisition of a $1.3 billion portfolio from Japan’s Norinchukin Bank, a stapled deal involving two of TPG’s Asia funds and a GP-led process on Vitruvian Partners’ 2007-vintage fund.
In November, Goldman Sachs held a $10.3 billion final close on flagship secondaries fund Vintage VIII, having already closed sizeable infrastructure and real estate secondaries vehicles during the year.
The fund was quick to take advantage of the opportunity presented by covid-19, putting $900 million to work in the second quarter in sectors such as technology, infrastructure and healthcare, a 40 percent increase on the same period of last year.
Goldman has backed a number of large GP-led secondaries deals in the second half of this year, such as a $1.25 billion single-asset deal focused on Clearlake Capital portfolio company Ivanti, also backed by ICG and Landmark Partners.
Shortly before the year drew to a close, AlpInvest Partners held the final close on its seventh secondaries programme. The Carlyle Group subsidiary raised $9 billion for AlpInvest Secondaries Program VII and an additional $1.2 billion for co-investments after barely a year in market.
Secondaries deals AlpInvest has backed this year include a $300 million GP-led process on Kinderhook Industries‘ third fund and the sale of a A$6 billion ($4 billion; €3.6 billion) portfolio by Australia’s sovereign wealth fund Future Fund.
State of Michigan Retirement Systems, Connecticut Retirement Plans and Trust Funds, Nebraska Investment Council and New Hampshire Retirement System were among those who committed to the fund, which mainly targets GP-led deals.
Deals the fund has backed include a $600 million yuan-to-dollar restructuring involving Chinese manager IDG Capital and a $1.5 billion preferred equity deal centered around the DeVos family office Ottawa Avenue Private Capital.