Secondaries fundraising in 2016 broke several records.
Paris-headquartered investment firm Ardian raised the biggest fund ever, ASF VII, and secondaries firms raised the highest amount of money in history, gathering $34 billion from 23 funds by 12 December, according to data from PEI.
This does not include Blackstone’s Strategic Partners Fund VII, which is expected to hold the final close in December or January on $7.5 billion, as Secondaries Investor reported.
The total amount of money raised in all of 2015 stood at $22.5 billion from 17 funds, according to PEI data. The 2016 amount also eclipsed the $33 billion raised by 31 funds in 2014.
These records illustrate how mainstream the secondaries market has become within private equity in the eyes of limited partners.
Meanwhile, the top five funds that closed in 2016 totalled more than $23 billion in committed capital, representing more than half of the total capital raised by 12 December, according to data from PEI.
Here are the top five funds of 2016:
- Ardian closed its latest fund of funds on $14 billion, which included the largest dedicated secondaries platform ever raised, the $10.8 billion Ardian Secondary Fund VII. This is not only larger than its previous vehicle, which closed on $10 billion in 2014, but also surpassed the previous record holder, Lexington Capital Partners’ Fund VIII, which closed on $10.1 billion in April 2015.
- HarbourVest Partners closed on $4.8 billion for Dover Street IX, beating its $3.6 billion target by more than $1 billion. Investors included the Michigan Department of Treasury and the Ventura County Employees Retirement Association among others. Dover Street VIII closed in 2013 on $3.6 billion. HarbourVest also celebrated the 30th anniversary of its first secondaries fund in 2016.
- Pantheon raised $3.5 billion for Pantheon Global Secondary Fund V, beating its target by $1 billion, Secondaries Investor reported in June. The firm launched the fund in 2013 and held a second close in January 2016 on $1.7 billion. The vehicle invests in secondaries of private assets, in addition to direct secondaries, co-investment portfolios, hybrids of fund stakes and direct portfolios, GP recaps and team spin-outs.
- Partners Group Secondary 2015 closed on €2.5 billion in March, hitting its hard-cap for its sixth dedicated secondaries vehicle. The fund will focus on global transactions of between $100 million and $250 million and has the ability to make smaller or larger deals on an opportunistic basis. The firm’s previous dedicated secondaries vehicle, Partners Group Secondary 2011, closed on €2 billion in 2012.
- Madison International Realty closed on Madison International Real Estate Liquidity VI with $1.39 billion, to focus on direct secondaries in real estate. This is the largest real estate secondaries fund that closed in 2016, although it is followed closely by Blackstone’s Strategic Partners Real Estate Fund VI, which hit its $1.3 billion hard-cap. This is Madison’s largest fund to date, exceeding its $950 million target.