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Alignment of Interest
HarbourVest now quizzes GPs about their views on NAV financing as part of its due diligence, managing director Lydia Hao tells PEI.
Speaking at an event in Hong Kong on Wednesday, the firm's head of APAC private wealth said it is 'critical' that open-end funds are valued frequently enough to assist subscriptions and redemptions.
Smaller managers are under pressure to commit to their own funds as LPs seek stability in a volatile market.
Already a prolific owner of alternatives managers via its balance sheet, global wealth manager AlTi will consider transitioning from LP to GP with the launch of a fund in this space.
Sponsors and management teams need to demonstrate their commitment to the next phase of growth.
Three of PEI’s Women of Influence – Morningside's Tori Buffery, KKR's Saleena Goel and LGT's Martha Heitmann – share their outlook on the GP-led secondaries market.
Adviser estimates put secondaries transaction volume at around $110bn, with GP-led processes accounting for roughly 45% of those transactions.
A lack of full exits means it is too soon to say how well this latest generation of GP-led secondaries will fare, but the ingredients for success are all in place, says Jochen Mende at UBS Asset Management.
Identifying a credible lead investor that will deliver on execution can be more important than extracting the last dollar on price, says Glendower Capital (CVC Secondaries) managing partner Chi Cheung.
Amid today’s environment and ongoing growth in GP-led deals, rolling carry and putting additional capital at risk are no longer enough to guarantee alignment, says Morgan Stanley Investment Management’s Nash Waterman.