The future is liquid

Options, swaps, forwards on PE fund stakes – could this be the future for private equity? Within 10 years, private equity will become an asset class that provides multiple options for both investors and sponsors, according to Holcombe Green, global head of private capital advisory at Lazard, who spoke to us for our PEI 300 coverage. “We’ll start to see more financial instruments crop up that make the secondaries market look more like a financial market. Derivatives on secondary trades, trading platforms for LP interests. If the market gets enough scale, you’ll start to see it act more like a securities market,” Green says. Predictions of this type are nothing new and market participants have long suggested private equity would do well to import technology from other financial markets to create greater liquidity for LPs and GPs. The capital is there already: anywhere between $91 billion and $155 billion in dry powder is available in the secondaries market, and Ardian’s $19 billion haul last week added to that pile.

Stafford buys Robeco

Stafford Capital Partners isn’t the biggest name in private equity but is well known in real assets, with niche strategies like timberland and agri funds of funds. The firm has now made a splash into European PE with the acquisition of Dutch asset manager Robeco’s private equity unit (press release here) in a deal that adds $1.5 billion to Stafford’s AUM. Stafford is raising a PE fund – SEPE VI – and is understood to be seeking €250 million for the vehicle, of which as much as half will be allocated to secondaries and co-investments.

We did the math