Partners hits €2.5bn hard-cap on latest secondaries fund

The final close on the Switzerland-headquartered firm’s sixth dedicated secondaries fund comes 10 months after it held a first close.

Partners Group has held the final close on its latest dedicated secondaries vehicle, the global investment firm said on Thursday.

The Zug, Switzerland-based manager hit the €2.5 billion hard-cap for Partners Group Secondary 2015, its sixth dedicated private equity fund. The vehicle will follow a value-based investment approach similar to its previous funds.

“We will build a diversified portfolio of high quality assets with emphasis on inflection assets – funds with assets that are generally four to six years old, where you can have very good visibility into the portfolio and make projections on the future value potential,” Adam Howarth, managing director and co-head of private equity secondaries, told Private Equity International's sister title Secondaries Investor.

The fund will focus on global transactions of between $100 million and $250 million and has the ability to make smaller or larger deals on an opportunistic basis, Howarth said.

Deals the fund will look at also include direct secondaries and spin-outs, as well as GP-led restructurings, which accounted for about 25 percent of opportunities the firm screened last year.

The firm has already started investing from the fund, Howarth said.

The final close of Partners Group Secondary 2015 leaves around nine funds in market seeking $1 billion or more, according to PEI Research & Analytics.

The fund held a first close last May, as Secondaries Investor reported, and took 12 months between launch and final close, according to a spokeswoman. The vehicle was registered in September 2014 in the UK, according to a regulatory filing.

The fund’s investor base includes a global mix of new and existing institutional investors, including the Pennsylvania Public School Employees’ Retirement System which committed $100 million, according to PEI data.

Partners screened over $91 billion of potential private equity secondaries deals last year and declined 99 percent of them due to high pricing, the firm said. The average high bid for all strategies last year was 90 percent of net asset value, according to a January report by Greenhill Cogent.

Stephan Schäli, co-head of private equity at Partners, said he expected pricing to drop: “Given the current volatility in equity markets, we expect prices to come down from recent highs and are poised to take advantage of the improved conditions for buyers.”

The firm’s previous dedicated secondaries vehicle, Partners Group Secondary 2011, closed on €2 billion in 2012 and is almost fully committed, according to Howarth.

Partners has invested over $13 billion in secondaries since it began investing in the strategy in 1998, the firm said.