Greenpark Capital, a European secondaries specialist, has closed its third and largest fund to date Greenpark International Investors III on €730 million ($983 million).
Investor demand pushed the fund past its original target of €500 million.
Marleen Groen, chief executive of Greenpark Capital said: “Investors have become increasingly receptive to secondaries as a portfolio management tool in the last few years, at the same time as they’ve been increasing allocations to the primary market.”
The firm will use the fund to acquire interests in buyout, development or growth capital, mezzanine and other funds, and portfolios of direct investments in private equity assets in the secondaries market.
Groen said: “The outlook for the secondaries market remains very positive. Between 2 and 4 percent of the total commitments made by investors to private equity funds now change hands each year. Large corporations and financial institutions are becoming more proactive, either voluntarily or as a result of shareholder pressure, in managing their long-term holdings or non-core activities in a more aggressive way, and that is leading to greater demand for secondaries.”
The fund attracted investment from institutions in Europe, the US and Asia and will focus on investments in Europe and the US. It is targeting mature assets, including single limited partnership positions through to portfolios of complex multi-jurisdictional fund positions, portfolios of direct investments and tail-ends of funds.
Groen said the increase in primary private equity funds being raised in the last couple of years has been a significant driver of the secondaries market, as LPs look to raise cash for new funds, or re-ups, by rationalising general partner relationships.
Greenpark’s fund is smaller than the biggest secondaries funds in the market. In April Coller Capital closed a $4.5 billion global secondaries fund, while Goldman Sachs’ asset management division closed a $3 billion fund.
But Groen said this meant the firm could specialise in the niche European mid-size transaction market, with lower levels of competition and consequently fewer auctions.