Secondaries fundraising hit record high in 2017

Private equity and real estate secondaries funds raised more than a combined $38bn last year, driven by Strategic Partners and Goldman Sachs Asset Management vehicles.

Secondaries fundraising across private equity and real estate hit a record high last year, according to PEI data.

Private equity secondaries funds accrued $38.3 billion across 26 final closes. The largest fundraise was by Strategic Partners, which in January collected $7.5 billion for Fund VII. This was followed by Goldman Sachs Asset Management, which is understood to have held a $7.1 billion final close in July on its Vintage VII fund.

The mean size of private equity secondaries funds to hold final closes last year was $1.47 billion, above the previous year’s figure of $1.38 billion and the 2015 average of $1.12 billion.

Two real estate secondaries funds completed fundraising last year, Belveron Partners Fund IV and Aberdeen Asian Property Multi-Manager IV, raising a combined $205 million, a figure set to rise considerably in 2018 with the impending close of vehicles from Landmark Partners and Partners Group.

Infrastructure secondaries also had significant fundraising events in 2017, including Ardian, which was set to hold the final close on $1.7 billion for ASF VII Infrastructure during the summer, the largest amount yet raised for the asset class.

Fundraising will slow a little in 2018 as fewer large funds reach final close, according to Yaron Zafir, head of secondaries at advisor Rede Partners.

“The longer term trends point to healthy room for growth in the market,” Zafir added. “We expect this to be driven by the double digit annual growth in primary fundraising over the last few years, the rising acceptance of secondaries transactions among both LPs and GPs and the fact that secondaries activity still accounts for a small percent of total primary activity.”