Private Equity Secondaries Special

Reinventing continuation funds

Whenever a market swells, it is inevitable that some growing pains will appear. For the secondaries market, which is on track for a record-breaking year, those issues are related to continuation funds. According to Evercore’s H1 2024 Secondary Market Review, such funds accounted for 43 percent of the $72 billion of deal volume seen in the first half – and yet, not all market participants are satisfied with how they operate. In our 2024 secondaries special, we speak to a host of investors to find out how they think continuation funds could be improved upon, as well as the other changes they would like to see in a growing secondaries market.

Also in this report, we reveal the results of the Secondaries Investor 50 ranking of the largest secondaries fundraisers, uncover the latest young secondaries talent to make this year’s Next Gen 10 list, and delve into how secondaries funds perform compared with their buyouts counterparts.

COVER STORY

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What do LPs really think of continuation funds?

Private Equity News & Analysis
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Investors including Alaska Permanent, Caisse des Dépôts, Skandia, New York City Retirement Systems and TRS Texas share their views on how this market can be improved and how they are positioning themselves to take advantage of CVs.
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PREVIOUS COVERAGE

2023

The future of LP secondaries

The disruptive power of artificial intelligence is a topic on everybody’s minds. In our 2023 secondaries special, we look at how the generative technology can be used to drive change in the secondaries market – particularly through the streamlining and standardising of trading processes. Experts who Private Equity International spoke to for this report suggest that significant changes to the way the market operates could be on the horizon. “This is the first time in 10 years I’ve seen this level of innovation,” said one managing director. A partner added: “An increasing pace of adoption is what’s happening right now.”

We also disclose the results of the Secondaries Investor 50, our annual ranking of the top 50 biggest secondaries fundraisers, and reveal the winners of this year’s Next Gen 10 list of the most impressive young talent in the secondaries market.

Private Equity News & Analysis

Could AI be the future of LP secondaries?

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Generative artificial intelligence is being applied to private markets at breakneck speed. The biggest hurdle to applying these software tools to LP secondaries trades is the market’s lack of standardisation.
The Secondaries Investor graphic
Funds

The Secondaries Investor 50 – fundraisers belie difficult 2023

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Our ranking of the biggest secondaries fundraisers reveals a market reaching an inflection point.
Private Equity News & Analysis

Next Gen Leaders of Secondaries: Class of 2023

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Now in its eighth iteration, we reveal this year's most impressive secondaries individuals under 36.
Illustration of various financial reorts
Featured

Secondaries H1 reports show a dip in activity

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A slow start to the year has led some market participants to lower their end-of-year estimates.
Private Equity News & Analysis

Five key trends moving the secondaries market

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Growth in the industry is being driven by greater acceptance and increasingly diverse liquidity options.
Geometric shapes stacked up beside a ladder reaching to the top
Funds

The rise of NAV lending

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Structured solutions can provide much-needed liquidity without forcing LPs to crystalise a loss.
Private Equity News & Analysis

At the top of the secondaries class

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Which SI 50 secondaries funds are the strongest outperformers?
Private Equity Deals & Transactions

All roads lead to infrastructure secondaries

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A confluence of factors is driving interest in infrastructure secondaries.
Investors

To sell, or not to to sell? That is the LP’s question

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LPs are facing a difficult choice as they balance liquidity challenges with the deep discounts on offer in the secondaries market.

2022

Finding alignment in secondaries

Alignment is a critical issue for LPs, GPs and secondaries buyers alike in today’s shaky fundraising environment. In our 2022 secondaries special, we look at how market participants can ensure their business isn’t slowed down by complex agendas or operational gridlock.

Further, we recognise the 50 biggest capital raisers of the past five years in the SI 50 ranking, and also celebrate the brightest young talents in the secondaries market with our Next Gen 10 leaders list.

Private Equity News & Analysis

Setting things straight: Just how aligned is the secondaries market?

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As an increasing number of sponsors turn to secondaries processes, doubts are being raised about the market’s building blocks. Just how aligned is the secondaries market today?
Private Equity News & Analysis

Secondaries alignment: Finding equilibrium through terms

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Some sponsors are still able to drive aggressive terms in GP-led deals, though perhaps not for much longer.
Private Equity News & Analysis

Secondaries alignment: Sort out your own house

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For the GP, internal alignment is another opportunity to manage team dynamics. Third parties will want to see that the right people participate in the economics.
Private Equity News & Analysis

Secondaries alignment: Finding a balance

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Conflicts of interest can arise within the LP base as LPACs act in their own interest, not in the interest of the fund.
Private Equity News & Analysis

Secondaries alignment: Name your price

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Finding the pricing sweet spot to satisfy sponsors, buyers and LPs is tougher than ever in today’s market.
Private Equity News & Analysis

Secondaries alignment: Engaging the portfolio company

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An incentivised management team is crucial to ensuring ultimate success in GP-led secondaries deals.
Private Equity News & Analysis

Secondaries alignment: Working within the rules

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When dealing with waterfalls, there are tools that can be used to create economic alignment from the outset.
The Secondaries Investor graphic
Funds

The Secondaries Investor 50 – fundraisers belie difficult 2023

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Our ranking of the biggest secondaries fundraisers reveals a market reaching an inflection point.
Private Equity News & Analysis

Next Gen Leaders of Secondaries: Class of 2023

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Now in its eighth iteration, we reveal this year's most impressive secondaries individuals under 36.
Illustration of various financial reorts
Featured

Secondaries H1 reports show a dip in activity

-
A slow start to the year has led some market participants to lower their end-of-year estimates.
Private Equity News & Analysis

Five key trends moving the secondaries market

-
Growth in the industry is being driven by greater acceptance and increasingly diverse liquidity options.
Geometric shapes stacked up beside a ladder reaching to the top
Funds

The rise of NAV lending

-
Structured solutions can provide much-needed liquidity without forcing LPs to crystalise a loss.
Private Equity News & Analysis

At the top of the secondaries class

-
Which SI 50 secondaries funds are the strongest outperformers?
Private Equity Deals & Transactions

All roads lead to infrastructure secondaries

-
A confluence of factors is driving interest in infrastructure secondaries.
Investors

To sell, or not to to sell? That is the LP’s question

-
LPs are facing a difficult choice as they balance liquidity challenges with the deep discounts on offer in the secondaries market.

2019

Special report: Risk in secondaries

Secondaries is a segment of private markets that has evolved more quickly than any other in recent years.

Investor appetite for both secondaries funds and engaging in the secondaries market continues to grow. But beneath the surface lie hidden risks that investors need to be aware of – as we identify in our special report. We also run down the young people driving that evolution and where the capital in the sector is going.

Funds

The SI 30 visualised

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See the largest secondaries fundraisers since 2014 and how much they have raised.
Private Equity News & Analysis

20 young people making waves in secondaries

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Young Guns of Secondaries Class of 2019: a look at the industry’s leading professionals under 36 as part of our September secondaries special.
Private Equity News & Analysis

Secondaries: Avoiding the hidden risks

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The strategy has evolved from focusing on diversification and J-curve mitigation to one making concentrated bets on often highly complex deals. Investors unaware of the potential risks face hidden dangers.
Private Equity News & Analysis

When secondaries go wrong: What the lawyers think

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When net asset values drop and LPs who rolled their interests into their GP’s vehicle start to think they should have sold their interests instead, there could be legal implications.
Private Equity News & Analysis

Secondaries pricing: Behind the NAV

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Buyers and sellers' expectations need to stay within touching distance of each other for a successful market.
Private Equity News & Analysis

Risk avoidance and allocation in secondaries transactions

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Ropes & Gray’s Raj Marphatia and Jianing Zhang explain how a secondaries transaction on an Indian-focused fund nearly fell apart.

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