Secondary market insights

How did PE secondaries do in the first quarter of this year?

According to Secondaries Investor, PE secondaries fundraising declined in Q1 of this year.

In the period from January to the end of March, dedicated funds focused on PE secondaries garnered $7.1 billion, indicating a significant 77% decline from the $30.0 billion reported in the prior year Q1 period, as per preliminary data from Private Equity International.

However, it should be noted that Strategic Partners Fund IX, a GP led fund, accounted for $25.0 billion of the $30.0 billion reported during the Q1 quarter in 2023.  Fundraising in 2024 appears to be anchored by smaller funds, while 2023 had some larger mega PE secondaries funds close.  

The slow growth of the secondaries market has been attributed to undercapitalization. A closer look reveals that secondaries vehicles represented only 4% of the $176.7 billion raised for PE strategies during Q1.

Furthermore, there was a 10% decrease in PE fundraising compared to the previous period, which saw $195.5 billion raised in Q1 2023. A total of 399 PE funds concluded fundraising activities in Q1, including 13 secondary funds.

Committed Advisors and Banner Ridge were among the top 20 largest PE vehicles that closed in the last quarter. The former collected $2.6 billion, surpassing its target by $200 million, while the latter closed with $2.15 billion, originally aiming for $1.4 billion.

More latest headlines about secondaries below.

Recent Developments:

• Pitush Departs from Peak XV Partners: Piyush Gupta, who has been with Peak XV Partners (formerly Sequoia Capital India & SEA) since 2017, is departing to establish his own fund. Although not directly involved in investing, he significantly contributed to the firm's strategic development. Despite his leaving, Peak XV intends to work with Gupta on secondary transactions. This comes at a time when secondary transactions are increasing in India, with notable deals including Pine Labs, Byju's, and PingSafe.

• Ares Acquires $1.1 Billion Worth of Private Equity Fund Stakes from Blackstone: Blackstone's Strategic Partners unit divested a $1.1 billion portfolio of private equity fund stakes to Ares Management Corp., marking Ares' largest deal within its secondaries group. PJT Partners provided advisory services for the transaction. Strategic Partners, under the leadership of Verdun Perry, manages assets totaling $69 billion, while Ares' secondaries group, led by Nate Walton, oversees assets exceeding $24.8 billion. The demand for liquidity among investors has driven an increase in private equity secondaries, with portfolio sales reaching $60 billion last year.

• Isomer Capital Gears Up for a VC Departure with its Latest Secondaries Fund: Isomer Capital unveils its VC Secondaries fund to access European venture capital prospects. Secondary transactions, involving stake sales to new investors, are increasing due to liquidity constraints. With a target of €100M, the fund has raised over €20M. The European VC secondaries sector is anticipated to expand, presenting Isomer with opportunities for broader engagement.

• B.C. Pension Fund Manager Offloads $1 Billion in PE Assets to French Buyout Firm Ardian: The British Columbia Investment Management Corp. (BCI) is shedding over US$1 billion in private equity fund stakes to Ardian SAS, a French buyout firm, utilizing the secondaries market to generate funds for new investments. BCI frequently employs the secondaries market to adjust its private equity portfolio and deploy capital into new ventures. Ardian's decision to establish an office in Montreal underscores its dedication to expanding its investment footprint in Canada, with a focus on sectors such as renewable energy.

At Axis Capital Markets, we are active in global debt placement and private market secondaries.   You can discover more about us here.

Also, touch base directly if you want to discuss any deals in the market.

Enjoy the weekend, Tim

tbarnes@axisgroupventures.com