While most private market firms have faced a challenging fundraising environment in 2023, those focused on secondaries were an exception.
Secondaries funds that invest in private equity opportunities raised more capital between the first three quarters of the year than any other similar period to-date, according to Secondaries Investor data. Vehicles that held their final close between January and the end of September raised $67.69 billion, a 168 percent jump on the same period last year. The figure was 46 percent more than the previous record of $46.44 billion raised in Q1-Q3 2020.
The strategy has grown in popularity as more LPs look to tap the market amid slowing distributions and persistent overallocation concerns. Nearly 60 percent of LPs plan to commit capital to private equity secondaries over the next year – the largest share of investors that have said so across a six-year period, according to affiliate title Private Equity International’s LP Perspectives 2024 Study.
Here are the top five standalone secondaries fundraises in 2023 in chronological order:
The largest secondaries fundraise of the year was completed by Blackstone’s Strategic Partners, which closed its Strategic Partners IX fund on $22.2 billion in January. It was also the largest secondaries fund and the seventh-largest private equity fund ever raised. The fund was twice as large as its predecessor, which raised $11.1 billion in 2019. The firm also raised $2.7 billion for its inaugural GP-led focused fund, Strategic Partners GP Solutions, alongside the close of the flagship fund.
In July, London-headquartered Glendower Capital closed its Glendower Capital Secondary Opportunities Fund V fund on $5.8 billion. The fund had surpassed the $4.5 billion hard-cap and the $3.5 billion target during its second close in February, Secondaries Investor reported at the time. It was the first vehicle closed since CVC Capital Partners acquired the firm in 2021. It was significantly larger than the predecessor fund, which closed on $2.7 billion in 2019.
Also in July, Toronto-based preferred equity specialist Whitehorse Liquidity Partners raised $5.3 billion for its fifth flagship fund, Whitehorse Liquidity Partners V. The fund, which closed above its $5 billion target, is the firm’s largest vehicle since its inception in 2015. Yann Robard, Whitehorse’s founder, said in a statement that Fund V closed during a time of high demand for customised portfolio financing options.
In September, Goldman Sachs Asset Management raised $14.2 billion for its ninth flagship private equity-focused secondaries fund, Goldman Sachs Vintage Fund IX. The Vintage team welcomed 30 new institutional investors to its platform with Fund IX, GSAM’s global head of secondaries Harold Hope told Secondaries Investor at the time. The fund closed above its $12 billion target.
London-headquartered Pantheon closed its seventh private equity secondaries fund on $3.25 billion in November, surpassing its initial $2 billion target. Pantheon Global Secondaries Fund VII was about 48 percent larger than its predecessor, which closed on $2.2 billion in 2020. Fund VII received commitments from a range of new and existing clients, including investments from the firm’s private wealth platform and its evergreen private equity vehicle AMG Pantheon Fund.
Other notable fundraises:
- In February, Morgan Stanley Investment Management held a $2.5 billion final close on the Ashbridge Transformational Secondaries Fund II, which focuses exclusively on single-asset continuation funds. Fund II was nearly four times larger than its predecessor launched in 2018.
- In May, Adams Street Partners closed its latest secondaries programme on $3.2 billion, including commitments from Minnesota State Board of Investment and Ventura County Employees Retirement Association. The predecessor programme was closed on $2 billion, Secondaries Investor reported at the time.
- Alongside GSAM’s September close of Goldman Sachs Vintage Fund IX, the firm also closed its debut commingled vehicle for infrastructure secondaries, Vintage Infrastructure Partners, on $1 billion. The fundraise means that the firm has dedicated secondaries capital for private equity, real estate and infrastructure assets.
– Adam Le contributed to this report.