LPs

The invasion of Ukraine has driven up the price of energy stakes, creating an opportunity for LPs to sell without having to accept a big discount.

Secondaries pricing has become uncertain, with inflation, supply chain disruptions, geopolitical turmoil and rising interest rates causing public market volatility since the beginning of the year.

The presence of a US public pension system as a lead investor is a reflection of the growing sophistication and desire on the part of some big US public plans to take more direct roles in investment management.

The move is significant for the Canadian pension giant, which until now had been unable to back such deals via its secondaries unit.

At least one LP reports intention to divest from NCH Capital’s Russia and Ukraine-focused agribusiness investments as quickly as possible.

Evelyn Zhang's appointment brings the headcount at the Canadian pension giant's secondaries team to 20.

The challenges of selling such a big offering are highlighted by growing uncertainty around secondaries pricing, weakening amid public market volatility, rising inflation and geopolitical shocks from Russia’s invasion of Ukraine.

There is a universe of potential deals in asset classes such as infrastructure not suited to typical secondaries funds, says Daniel Roddick, founder of Ely Place Partners.

Portfolios with valuations pegged to 30 September no longer reflect market dynamics, including public market volatility, plunging tech valuations and geopolitical turmoil sparked by Russia’s invasion of Ukraine.

Some portfolios that hit the market this year may take longer than expected to sell or may not transact as buyers look for pricing that reflects the reality of market turmoil.