Fund of funds specialist Portfolio Advisors has raised its first dedicated secondaries fund, collecting $1.1 billion for investments that will add to the firm’s already robust secondaries practice.
Darien, Connecticut-based Portfolio Advisors has been making secondaries investments since 2003, completing more than $1 billion in transactions involving more than 300 underlying partnerships. The new fund is the firm’s first fund that will be used solely for secondaries purchases.
Fundraising took about 18 months, according to Paul Crotty, managing director with Portfolio Advisors. The fund of funds used Fortress as a placement agent for a portion of the fundraising, Crotty said.
“They did not represent all of the fundraising. There was direct fundraising on our part where they were not involved,” Crotty said.
The firm was able to attract new LPs to the fund. Crotty would not name the LPs, but the firm said in a statement investors include private and public pensions, university endowments, family offices, high networth individuals and foundations.
About $200 million of the fund has been invested, Crotty said. He declined to describe the investments.
Portfolio Advisors is not interested in so-called “early secondaries” stakes, Crotty said. Early secondaries are limited partner interests held by investors for a short period of time.
“We look for opportunities that are greater than 50 percent funded,” he said.
Portfolio Advisors comes to a secondaries market that has become increasingly crowded with firms boasting large funds. 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.
Goldman and Axa Private Equity are raising $300 million and €600 million respectively for funds that will focus on early secondaries.
Some significant sellers have come to the secondaries market recently. Stanford University has been looking to sell up to $1 billion of its private equity portfolio, and AIG Investments recently revealed it was selling $600 million in LP commitments that are only partially called.
Portfolio Advisors closed its fifth private equity fund of funds with $1.05 billion in April.
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