Private Market Secondary recent updates

Private Market Secondary recent updates

According to Lexington Partners, as cited by a Franklin Templeton report, the global secondary market has expanded over the past three decades mainly due to the increased supply of capital committed to private investment funds. Lexington estimates that the secondary industry volume hit a record high of $128 billion in 2021 and surpassed $100 billion in both 2022 and 2023. This growth is driven by several factors, including primary fundraising volume, limited partners (LPs) seeking liquidity due to a lack of distributions, and an increase in general partner (GP)-led transactions. They believe that the outlook for the secondary market in 2024 remains attractive.

Unlocking Opportunities: Understanding The Growing Secondary Market, a report recently published by Franklin Templeton, indicates some insights on the Secondary Markets’ trends this year.

  • Undercapitalization: The secondary market currently has a supply-demand imbalance, with higher demand for liquidity than the available secondary buyer capital. This shortage creates a potential pricing advantage for secondary buyers.

  • Growth Drivers: The growth of the secondary market has been driven by more active management of illiquid investments and an increase in GP-led transactions, resulting in a 14% annual growth rate over the past 13 years. This expansion parallels the growth in primary PE fundraising, indicating continued growth as recent large vintages mature.

  • Discount Trends: While discount rates were stable for over a decade, they increased in 2022 and 2023 due to market volatility and expectations of declining net asset values (NAVs). This has resulted in more conservative underwriting by secondary buyers and higher discounts.

Outlook for 2024

The secondary market remains attractive due to:

- LPs seeking liquidity amid declining distributions and portfolio rebalancing.

- GPs under pressure to provide liquidity options to LPs.

- An undercapitalized market creating favorable conditions for buyers.

Overall, the secondary market is poised for significant opportunities in the coming years, driven by its increasing volume and evolving dynamics.

Recent Developments

  • Impact secondaries transactions currently represent a small fraction of the overall secondaries market, but they provide greater certainty around impact-related growth compared to blind-pool funds. The impact market still lacks a standardized benchmarking strategy, and GP-led secondaries can better establish key performance indicators (KPIs). While the impact secondaries market is still evolving, more managers are expected to introduce assets that require additional time to achieve significant impact. Despite being a minor segment of the more than $100 billion annual secondaries volume, this asset class is anticipated to grow as it matures.

  • CVC Capital Partners has expanded its secondaries platform by acquiring Glendower Capital, a London-based firm. This acquisition capitalizes on the rising demand for secondary market strategies, which provide greater liquidity. Established in 2017, Glendower focuses on fund portfolio secondaries and GP-led secondaries. The merger resulted in a combined entity with approximately €113 billion ($133 billion) in AUM.

  • Leonard Green & Partners is aiming to raise $1.5 billion for its inaugural general partner-led secondaries fund, named "Sage." The Los Angeles-based firm will focus on single-asset continuation vehicles and targets a first close in the second half of the year. This expansion aligns with Leonard Green's strategy of backing leading companies in their sectors. The secondaries market is increasingly popular, with firms using continuation vehicles to provide liquidity to investors.

If you’re interested in discussing potential deals and market prospects, feel free to shoot me a message.

My firm, AXIS Group Ventures , specializes in global debt placement and private market secondaries for VC and PE backed companies.??

All the best - Tim

[email protected]

#alternativeinvestments #secondaries #venturecapital #privateequity #privatedebt

Tim Barnes

Investment Banker I USAF Veteran I Debt Capital placement I Private Market Secondaries I [email protected]

6 个月

Here is a link to the report mentioned:

回复

要查看或添加评论,请登录

Tim Barnes的更多文章

  • Trends in the Secondary Market: A Mid-Year Review

    Trends in the Secondary Market: A Mid-Year Review

    We are catching up on posting this mid-year review on the secondary market. In the first half of 2024, secondary market…

    2 条评论
  • Recent news on Non-sponsored Lending trends

    Recent news on Non-sponsored Lending trends

    Adapting to Change: The Rise of Non-Sponsor-Backed Private Credit in a Shifting Market In an article by Private Debt…

    2 条评论
  • Private Market Secondaries

    Private Market Secondaries

    Charting the Landscape: FH 2024's Private Market Secondaries and Fundraising We're excited to bring you some compelling…

  • Private Credit market news

    Private Credit market news

    Navigating the Evolving Private Debt Market At the Super Return International conference held in Berlin over the…

  • Private Market Secondaries - recent news and reports

    Private Market Secondaries - recent news and reports

    Surging Momentum in the Secondary Market: Growth Drivers and Emerging Trends Global secondaries transaction volume has…

  • Private Credit recent industry news

    Private Credit recent industry news

    US Private Credit Defaults Hit Highest Level Since 2020, Proskauer Index Reports Private credit defaults in the US have…

    2 条评论
  • Private Market Secondaries - July 2024 market data points

    Private Market Secondaries - July 2024 market data points

    Record Private Equity Dry Powder and Rising Secondary Market Activity Signal Growth Ahead Private equity dry powder hit…

    2 条评论
  • Private Credit Market update

    Private Credit Market update

    Private Credit Outlook for H2 2024: Growth, Challenges, and Market Dynamics As we move into the second half of 2024…

    4 条评论
  • Private Market Secondary news and updates

    Private Market Secondary news and updates

    Continuation Funds and Secondaries: New Strategies in Venture Capital Continuation funds are gaining traction in…

  • Private Credit - a few things

    Private Credit - a few things

    Exploring the Growth and Impact of Non-Bank Financial Intermediaries The appeal of private credit (or private debt)…

社区洞察

其他会员也浏览了