SEC proposes sweeping changes that affect secondaries industry
In February, the Securities and Exchange Commission introduced measures that could fundamentally change the way the secondaries market operates. Sponsors would be required to obtain a fairness opinion to ensure that the price of GP-led deals is reasonable, and they would have to divulge to LPs the nature of their relationship with the opinion provider over the preceding two years.
As Secondaries Investor reported, the industry is pushing for exceptions to the rule. Yet the most significant thing here might not be the rules around GP-led deals, but the fact that the SEC is moving from requiring enhanced disclosure to outright prohibiting certain practices, notably with its rules around preferential treatment.
This “opens a Pandora’s box, either now or in the future” for additional activities to be added to that list, said Joseph Zargari, a partner with law firm Morgan Lewis.
Apollo hires three BlackRock MDs to lead PE secondaries build-out
A story that resonated throughout the alternatives market: the departure in April of three managing directors at BlackRock for Apollo Global Management (or, according to BlackRock, their firing). News of the departures of Steve Lessar, Konnin Tam and Veena Isaac emerged just as BlackRock was returning to market with its second Secondaries & Liquidity Solutions fund, which is seeking $4 billion. The team closed its debut vehicle in May last year on $3 billion.
BlackRock has since promoted New York-based secondaries professionals Jarid Colucci and Derek Krouner to managing director, Secondaries Investor reported.
Strat Partners IX raises $12.8bn in one quarter
Secondaries Investor’s ranking of the largest fundraisers has run since 2016 and one firm, Ardian, has topped it every year. This could be about change. In January, we reported that Blackstone’s Strategic Partners IX was on track to reach $20 billion, which would make it, by $6 billion, the largest secondaries fund yet. It raised $12.8 billion in the fourth quarter alone, making light work of a $13.5 billion target. Blackstone is also in market with a fund aimed at GP-led secondaries deals and its eighth real estate secondaries fund.
“It’s a market we like a lot,” said COO Jon Gray in January. “There seems to be some structural inefficiency because of the lack of liquidity, and it’s growing fast.”
Ardian drops senior execs from key person group on ASF IX
At Ardian, the old guard is handing over the keys. Secondaries Investor reported in March that for its ninth flagship secondaries fund, senior managing directors Benoît Verbrugghe, Olivier Decannière and Ingmar Vallano would not be listed as key people. This means that four of the eight key persons listed on ASF VIII have either left the firm or are stepping back from day-to-day responsibilities.
In February, Secondaries Investor reported that Ardian is seeking $15 billion for ASF IX, the same target as Lexington Partners’ latest fund. All eyes are on Ardian as it fights for its spot at the top of the fundraising table.
Oaktree acquires 17Capital in pref equity and debt play
This year has been quiet compared with the M&A spree of 2021, but one deal stood out. In March, Oaktree acquired London-headquartered preferred equity specialist 17Capital three months after Secondaries Investor revealed it was for sale.
17Capital has raised five preferred equity funds since 2010, its most recent being the $2.9 billion 17Capital Fund 5. In April, it held a final close on its first fund dedicated to NAV-backed lending, raising a cool $3 billion. As more large asset managers look to asset-backed lending to help quickly grow AUM, 17Capital is unlikely to be the last to be snapped up.
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