Partners Group is the latest alternative asset manager to amass dry powder destined for secondaries deals, having raised €2.5 billion for its third global secondaries fund.
Marketed for a “little more than 18 months”, the fund surpassed its €2 billion target and is more than double its predecessor, which closed on €1 billion in September 2006. Partners Group does not use a placement agent.
The fund, dubbed Partners Group Secondary 2008, attracted a “broad group” of global limited partners, according to a spokeswoman who declined to disclose LPs. According to sister data service Private Equity Connect, its investors include the New Jersey Division of Investment, the Pennsylvania Public School Employees Retirement System, Australia’s Hostplus, Denmark’s Pension Forsikrings and Switzerland’s Schindler Pensionskasse.
The fund will pursue the same global strategy as its predecessor, however it may target an increasing number of early stage secondary interests for sale, according to the spokeswoman.
The firm said in a statement the fund has been actively investing “throughout the market crisis” in prior quarters, “purchasing a number of assets at prices that can with hindsight now be seen as among the historic lows”.
Partners Group gave two examples of such transactions. In early 2009, it purchased a portfolio of assets from a bank at a discount of more than 70 percent to net asset value. It expects the deal to produce an IRR in excess of 20 percent. The firm also recently completed a deal with a distressed seller, purchasing assets at a 50 percent discount, which it expects to produce a 2x multiple and an IRR greater than 20 percent.
A spokeswoman did not immediately confirm how much of the fund is left to deploy.
Partner Stefan Näf said in a statement that the firm is “very comfortable with the portfolio we have built for our clients and have a substantial amount of dry powder remaining to invest in the upcoming attractive secondary vintage years”.
The niche secondaries market has in many cases been defying slowed fundraising statistics for the private equity industry. Portfolio Advisors recently closed its debut secondaries fund on $1.1 billion, while JPMorgan’s asset management division recently closed a $1 billion secondaries fund and Goldman Sachs collected $5.5 billion for its fifth secondaries fund earlier this year. Other firms well-stocked with capital for secondaries this year include HarbourVest Partners, which raised $2.9 billion; Morgan Stanley, which closed a $1.14 billion fund; and Pomona Capital, which collected $1.3 billion.