Appetite still strong for secondaries funds

Secondaries fundraising hit its second-highest half-yearly total ever in H1 2021, despite being down 27% in year-on-year terms.

Secondaries funds that held a final close raised $39.8 billion in the six months to 30 June, down from $54.5 billion in the first half of 2020, per PEI data. This is still the second-highest half-year total on record.

A total of 38 funds held final closes on capital in H1, the largest being Coller International Partners VIII, which raised $9 billion in January, accounting for nearly one quarter of capital raised.

Seven funds, one of which was infrastructure-focused, closed at more than $1 billion, including those of LGT, Whitehorse Liquidity Partners, Hamilton Lane, BlackRock and Landmark Partners. The average fund size at final close in H1 was $1.05 billion, down from $1.87 billion for full-year 2020.

While multi-regional funds still account for a majority of secondaries capital raised, the proportion for European secondaries increased by 5 percentage points in H1, compared with FY 2020.

North America-dedicated funds accounted for 24 percent of the total raised, holding steady with 2020 – the highest recorded over the trailing five years.

As of 1 July, secondaries in market were targeting $84.9 billion, compared with $72 billion at the end of 2020.

Lexington Partners and Strategic Partners are expected to drive fundraising from H2 with what are set to be two of the largest secondaries funds.

Multi-regional accounts for nearly two-thirds of the amount targeted by secondaries funds in market.