Preferred equity

Canada's largest pension fund has used preferred equity in a transaction that helps the Asia-focused buyout firm with its Fund V, Secondaries Investor has learned.

Giorgio Riva, a key member of the Canadian pension giant's secondaries team, has joined the preferred equity specialist as a partner, Secondaries Investor has learned.

The preferred equity specialist, led by former CPPIB secondaries head Yann Robard, closed its debut fund in May.

The former Coller Capital exec has left the preferred equity pioneer after three years.

The preferred equity pioneer had a 90% re-up rate in its latest vehicle that exceeded its initial target.

As the secondaries market matures, strategies have become more diverse. Ardian, Azini Capital and 17Capital are three firms that stand out.

While the secondaries market is providing a convenient avenue for limited partners to sell fund stakes and access to liquidity, alternatives such as preferred equity have become welcomed opportunities for LPs looking to preserve portfolio upside, explains Pierre-Antoine de Selancy, managing partner and co-founder of London-based 17Capital.

Investors buying a preferred equity position in funds with a structured investment approcach can more easily decrease risk compared to investors in traditional secondary funds, according to a study conducted by 17Capital and PERACS.