Leverage

One of the interests sold in the manager's 2006-vintage distressed fund was a $100m stake held by Ontario Teachers' Pension Plan, Secondaries Investor has learned.

Secondaries funds take full advantage of subscription lines, but subscription lines also benefit from the secondaries market.

Providers of subscription lines are increasingly looking to take control of LP transfers, according to lawyers at Debevoise & Plimpton.

Buyers are using levels of leverage that 'haven't been seen before', according to Mario Giannini.

Some investors are in favour of reducing the frequency of capital drawdowns; many are concerned about the risks of extending loan periods.

Not having negotiated subscription lines themselves, investors may be unaware of terms that could block sales of their interests, writes Andy Thomson, editor of sister publication Private Debt Investor.

In this third excerpt from sister publication Private Equity International's secondaries roundtable, some of the market’s top participants discuss the use of leverage to boost returns.

The number of leverage providers in secondaries has more than doubled over the last four years, according to the report obtained exclusively by Secondaries Investor.

Drivers include increasing competition and record high dry powder, according to a report by the Swiss bank obtained by Secondaries Investor.

Fewer buyers sought IRRs of above 15% last year compared with a year earlier, a survey by advisory firm Cebile Capital has found.