A decline in GP-led secondaries volume last year belies the market’s upwards trajectory in the long run.

This ongoing maturation of the GP-led secondaries market was the focus of affiliate publication Private Equity International’s GP-led Secondaries Report. The report explores the rise of dedicated funds and specialist strategies, as well as the evolution of terms and deal types. It also answers the key questions LPs and GPs might have about GP-led transactions, from timelines and costs through to due diligence and status quo options.

Estimates for annual GP-led transaction values often vary. According to Jefferies, for example, volumes dropped from around $68 billion in 2021 to $52 billion last year; Evercore puts GP-led volumes at $48 billion for 2022 and Lazard at $44 billion. Whatever the precise figure, last year was still the second largest for GP-leds on record.

On the fundraising side, ICG Strategic Equity raised what is understood to be the largest pool of capital dedicated to GP-leds yet when it closed ICG Strategic Equity IV on more than $5 billion in June. Some five months later, affiliate title Secondaries Investor reported that Blackstone’s secondaries unit had surpassed the target for its inaugural GP-led strategy, Strategic Partners GP Solutions, after raising some $2 billion. As the new year began, Blackstone confirmed the fund had closed on $2.7 billion, forming part of a whopping $25 billion raised for its latest secondaries programme.

And while pricing challenges and macroeconomic headwinds impacted the number and size of GP-led deals that completed last year, there were still a number of eye-catching processes in the works. In July, for example, Coller Capital said it was co-leading on what it believed to be the biggest GP-led transaction in Asia – a $1.5 billion single-asset continuation fund deal centred on Hahn & Company-backed South Korean cement business Ssangyong.

Meanwhile, Goldman Sachs Vintage FundsPartners GroupKKR and Lazard were awarded Secondaries Deal of the Year for the Americas in this month’s PEI Awards for a single-asset continuation fund process involving KKR’s consumer website operator Internet Brands. Affiliate title Buyouts reported that the deal was worth as much as $2.5 billion and that Internet Brands was valued at more than $12 billion in a separate minority stake sale.

The GP-led market is also extending its reach: in early January 2023, Secondaries Investor reported that Summa Equity was looking to move Norwegian biowaste company Norsk Gjenvinning from its debut fund to a separate vehicle, in what is thought to be one of the first GP-led transactions undertaken by a dedicated impact manager.

Such examples of ‘first’ and ‘largest’ are indicative of the GP-led market’s increasing maturity, and signal its capacity for growth over the longer term. Transaction volume may have fallen last year, but it remained double that of five years ago – a testament to the market’s resilience.