Pantheon’s Leaf on the growth plan for her upcoming tenure as CEO

Pantheon, the fourth-largest Europe-headquartered secondaries firm according to the SI 50 ranking, will ramp up its secondaries offering under the leadership of incoming chief executive Kathryn Leaf.

Leaf, who is co-head of investment and global head of real assets at Pantheon, will succeed Paul Ward in the role from January next year, according to a statement last month. Ward will become executive chairman following a 20-year career at the firm.

One of the main growth areas for Pantheon will be to build up its secondaries expertise across different asset classes, Leaf told Secondaries Investor. She noted the firm has already been investing in secondaries across private equity, credit, infrastructure and real estate.

“One of the key pillars for our business going forward will be to continue to capitalise on the attractive opportunities that we see ahead from a secondaries perspective,” Leaf said. “Innovation is a really important part of our DNA. That led us to expand early outside private equity.”

In January, the firm closed its fourth secondaries-focused infrastructure fund, Pantheon Global Infrastructure Fund IV, on $5.3 billion, significantly surpassing its $3 billion target. Last November, it raised over $3.25 billion for its seventh PE secondaries flagship fund, Pantheon Global Secondary Fund VII, ahead of its $2 billion target, according to Secondaries Investor data.

Pantheon’s approach to secondaries investing is to train asset class specialists to become secondaries investors, rather than the other way around. This is an important feature that differentiates the firm from other market participants, Leaf said. The firm has around 130 investment professionals, more than 80 of whom are involved in secondaries, she added.

Primary investments and co-investments are “highly synergistic and complementary” to Pantheon’s secondaries business and will become another growth area for the firm across different asset classes, Leaf noted.

Developing private wealth products will also become a top priority for Pantheon when Leaf takes the top role.

“The institutional market, which is where we’ve grown up, continues to be a core focus for us, but we do see an opportunity to expand our product offering to a broader group of investors,” Leaf said. “We are looking to give private wealth investors access to the full suite of investment strategies that we have, [including] secondaries, co-investments and primaries.”

Pantheon has filed to register a private credit secondaries-focused investment strategy dedicated to the US private wealth market, Secondaries Investor reported in October. The firm also has an evergreen PE fund, AMG Pantheon Fund, which has just over half of its $2.37 billion of AUM invested into secondaries, according to its fund factsheet.

“Secondaries are really good fit for evergreen vehicles because… there’s a nice liquidity profile with early distribution that comes back from secondaries,” Leaf said, adding that the firm’s prior experience in launching semi-liquid products will help address private wealth investors’ unique liquidity needs.

While many PE firms have been expanding their secondaries capabilities through acquisitions, Pantheon aims to develop these in house.

“We are opportunistic when it comes to M&A, but we’ve got a good track record around organic [growth], so any time we can build the same capabilities internally, that’s always going to be our preferred choice,” Leaf said.