PE Key Trends Blog

Dormant secondary fundraising market belies long-term trend

Sep 26, 2019 12:06:23 PM / by palico posted in secondaries

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dormant secondaries post blog post

It has been all quiet on the secondaries fundraising front so far this year seeing only seven final closes worth a combined $2.4bn, a considerable shortfall on the $30bn raised during the same period last year. Average fund size has also fallen by more than half from $876m in 2018 to $395m, Preqin figures show. 

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Secondaries “go big”, but what about the forgotten middle?

Aug 29, 2019 1:16:54 PM / by palico posted in secondaries

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Secondaries “go big”, but what about the forgotten middle_article image

Secondaries fund managers are in an arms race. For the last few years, Ardian and Lexington Partners have been vying for the top spot, raising successively record-breaking vehicles to snatch up every pre-owned PE fund stake in sight. However, they’re not the only ones amassing hefty arsenals. Nine of the ten largest firms in the market at the beginning of 2019 had raised the targets on their latest flagship funds by an average of 75%, PEI data show, in a case of “go big or go home”.

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Q&A with CAH Capital

Aug 7, 2019 4:32:55 PM / by palico posted in Private Equity Strategies

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Christof Wolfer is a founding Partner at CAH Capital, a Switzerland based venture fund focusing on the global animal health industry. We took some time to chat with him about his outlook on the sector and their investment approach in this specialised segment.

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GP-Led Best Practices:  The right way to approach this growing sector of secondary transactions

Aug 1, 2019 5:00:18 PM / by palico posted in secondaries

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gp-led best practices image

 

Proactive communication, transparency, and fair timelines are essential to preserving investor relationships

GP-led secondaries hit a record $22bn in 2018, a 38% increase on the previous 12 months and triple the levels seen a year earlier. The momentum has continued into 2019 with H1-2019 doubling the figures from H1-2018.

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When the Denominator Effect Comes Calling

Jul 19, 2019 1:52:43 PM / by palico posted in secondaries

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Denominator effect article image

Few talk about the denominator effect these days, but they soon will. For those with short memories, the phenomenon refers to the relative weighting to private equity (the numerator) in an investor’s portfolio growing by virtue of a fall in the public markets (the denominator). This skews target allocations, forcing LPs to rebalance their portfolios by selling fund positions in the secondary market.

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Secondary Pricing Report H1 2019 - Funds Selling at Par in a Market Poised for Record Volume

Jul 11, 2019 11:07:33 AM / by palico posted in Private Equity KeyTrends, secondaries

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Secondary Pricing report H1 2019

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Q&A with Exergy Capital Management LLP

Jul 9, 2019 3:53:38 PM / by palico posted in Private Equity Strategies

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Fasten your seat belts ladies and gentlemen - LPs turn to the secondary market in preparation for a hard landing

Jun 28, 2019 2:07:23 PM / by palico posted in secondaries

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It’s time to adopt the brace position. Tough times are on the way. There are few who doubt we are now teetering on the brink of an economic downturn after one of the longest bull-runs in history. 

Just under two-thirds of LPs in Preqin’s H1 2019 Alternative Asset Investor Outlook think we have reached the peak of the market.

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The Rise of Family Offices and Secondary Interests

Jun 21, 2019 12:51:04 PM / by palico posted in Palico PE Insights, Palico Secondary Insights

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Family offices continue to be a hot topic these days. According to FINTRX, a Boston-based family office data and research platform, there are now 2,350 family offices globally, with over $50 million in AUM. That is an increase of 23% over the previous year when the same report showed 1,910 family offices with over $50 million in AUM.

As family offices continue to grow in size and volume, so have their commitments to private equity, and no exception has been their evolving and growing appetite for secondaries - a trend which has grown much faster than most might realize.

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Secondary Deals: Is the whole always greater than the sum of the parts?

May 23, 2019 5:47:03 PM / by palico posted in Palico PE Insights

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Secondary portfolios are trending towards majority or single buyer sales, but sellers may be missing out on optimizing pricing

Billion dollar transactions are becoming more commonplace in the secondary market, with sellers shopping around record-breaking portfolios as of late. Secondary funds are raising record amounts of capital, just note the surge of mega-funds in the sector, that will need to be deployed in the years to come. With the secondary market continuing to grow, there will surely be increased appetite to pick-up large portfolios being shopped around by mainstays in the advising industry such as Greenhill, or Campbell Lutyens. In cases where the sale is prompted by distress or regulation, selling lines in bulk can be a necessary outcome. However, when these pressures aren’t present are sellers maximizing value via large portfolio sales? Is the whole always greater than the sum of the parts?

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