LP Sales

Here’s a preview of PEI’s upcoming secondaries roundtable and what participants think is in store for a market that seems to know no bounds.

Secondaries pricing has become uncertain, with inflation, supply chain disruptions, geopolitical turmoil and rising interest rates causing public market volatility since the beginning of the year.

GP-led deals are flying high as more sponsors look to the secondaries market to hold on to prized assets for longer.

The challenges of selling such a big offering are highlighted by growing uncertainty around secondaries pricing, weakening amid public market volatility, rising inflation and geopolitical shocks from Russia’s invasion of Ukraine.

Portfolios with valuations pegged to 30 September no longer reflect market dynamics, including public market volatility, plunging tech valuations and geopolitical turmoil sparked by Russia’s invasion of Ukraine.

Some portfolios that hit the market this year may take longer than expected to sell or may not transact as buyers look for pricing that reflects the reality of market turmoil.

The sale is one of several that hit the market since the second half of 2021, when traditional LP portfolio sales came surging back into the market.

The CalPERS sale is among a slew of traditional LP portfolio sales to hit the market since the fall, with prices high and buyer interest piqued by more diversified investments.

Strong currents also point to much more opportunistic buying and selling, according to affiliate title Private Equity International's LP Perspectives 2022 Study.

The $49bn state pension cited the glut of dry powder and new entrants into PE driving a desire to consolidate manager relationships.