LP Sales

LPs are facing a difficult choice as they balance liquidity challenges with the deep discounts on offer in the secondaries market.

Generative artificial intelligence is being applied to private markets at breakneck speed. The biggest hurdle to applying these software tools to LP secondaries trades is the market’s lack of standardisation.

There’s an interesting dynamic playing out in the secondaries market that suggests LPs’ thinking about how to manage their portfolios is evolving.

The process is part of a surge of LP portfolios that have hit the market this year as institutions look for ways to generate liquidity and rebalance their exposure to the asset class.

Recent weeks have seen a surge of LP portfolio sales that some believe will swell into a wave of transactions.

The portion of LPs looking to back secondaries funds is only increasing as investors seek ways to turn negatives into positives in the current crunch.

Secondaries funds of vintage 2019-21 will see significant impacts on their internal rates of return, Vincent Gombault has warned.

A fundamental shift in capital markets is forcing many institutional investors to rethink their portfolios, creating a perfect storm for the resurgence of investor-led secondaries.

LP sales were expected to kick off a resumption of robust secondaries activity after a slowdown late last year, with external factors such as the collapse of Silicon Valley Bank keeping activity muted.

PEI’s annual investor survey indicates that LPs aren’t rushing to exit every deal, but they do expect third-party valuations.