Private Equity Spotlight

Specialised secondaries strategies are becoming an increasingly important part of the market. According to data complied by Secondaries Investor, 85 percent of the capital raised by secondaries funds in final closes last year was for private equity strategies; the remainder of this was for non-PE strategies, and the year before that more than one-third of capital raised was for non-PE strategies. There is also increasing specialisation within private equity secondaries, as firms including Lexington Partners, Strategic Partners, AlpInvest Partners and LGT Capital Partners carve out teams to focus on single-asset continuation funds. In episode seven of the Decade of Secondaries Investing miniseries, senior editor Adam Le sits down with Jeremy Coller, chief investment officer and managing partner at Coller Capital, and Yann Robard, managing partner at Dawson Partners, to discuss how far the asset class has come in terms of specialisation and cross-asset-class appeal. For full coverage of our Decade of Secondaries Investing series, including all podcast episodes and an interactive timeline, click here. Listen: "Everything you wanted to know about preferred equity"

This episode is sponsored by Nuveen Infrastructure and NextEnergy Capital Clean energy is key to turning the world’s net-zero ambitions into a reality, an argument few would contest. So the IEA’s 2023 World Energy Investment report, which showed that clean energy investing rose at a faster rate than investment in fossil fuels in the period between 2021 and 2023, offers plenty of cause for optimism that the world is on the right path to tackling the climate crisis. But it’s not moving fast enough, according to the United Nations, which has warned that government commitments are falling well short of what’s required to deliver net zero by 2050. It says that billions in capital must be ploughed into the energy transition to end reliance on polluting fuels. In this episode of Spotlight, Infrastructure Investor’s Helen Lewer speaks to Joost Bergsma, global head of clean energy at Nuveen Infrastructure, and Michael Bonte-Friedheim, founder and group CEO of NextEnergy Capital, to gauge whether institutional capital’s loyalty to the agenda has wavered amid a difficult fundraising backdrop. Their conclusion? With many LPs under-allocated to infrastructure and the fundamentals for clean energy investing still sound, they expect more capital to flow into the space in 2024 and beyond. But managers with track records will have an edge in the competition for capital.

Post-global financial crisis, many institutional investors were forced sellers, offloading private markets exposure at hefty discounts. More than a decade on, these same institutional investors have become repeat sellers on the secondaries market, using the tool as a way to proactively manage their portfolios. How has LP sentiment toward the secondaries market changed, and what is the outlook for this mainstay of the sub-sector? In this sixth episode of the Decade of Secondaries Investing miniseries, Secondaries Investor senior reporter Madeleine Farman sits down with Jeffrey Keay, managing director at HarbourVest Partners, and Adrian Millan, partner at PJT Park Hill. Keay and Millan take a deep dive into LP portfolio management and look at how institutional investors are using secondaries as a tool to manage private markets exposure. We look into the evolution of programmatic secondaries sales and explore the drivers and dynamics behind why some institutional investors are repeat sellers of private markets exposure. For full coverage of our Decade of Secondaries Investing series, including all podcast episodes and an interactive timeline, click here Read: "Liquidity the primary use case for GPs looking to enter secondaries processes – PJT" Read: "Evercore: distressed sellers 1% of 2013 market volume"

This episode is sponsored by the Credit Investments Group (CIG) Private credit has expanded exponentially in recent years, with most citing the contraction in syndicated markets as the cause of that growth. But now those markets are opening back up, and questions linger about how that will affect private credit. So what do continued inflation and elevated interest rates mean for today's managers? What does private credit look like now, and how will it adapt to a new macroeconomic landscape? Will private credit shrink in the wake of access to public credit, or will the two co-exist to provide a full suite of financing options to their clients? In this episode, we'll look back at the causes of private credit's recent boom, how much of that boom might continue, and what the future of lending is likely to be in the coming years. We’re joined by Kevin Lawi, private credit portfolio manager and head of origination at the Credit Investments Group in UBS Asset Management (formerly known as Credit Suisse Asset Management), along with his colleague on the public side, David Mechlin, a US portfolio manager and member of the CIG Corporate Credit Committee.

The US Securities and Exchange Commission’s recently passed rules relating to the GP-led secondaries market have put these deals squarely on LPs’ radars. “[These rules] raise the visibility of GP-led transactions to LPs and they signal how important and risky those transactions might be,” Igor Rozenblit – managing partner and founder of governance, risk and regulatory services provider Iron Road Partners and the former private equity expert in the Division of Enforcement of the SEC – told Secondaries Investor. “I wouldn't be surprised for LPs who have already focused on these transactions to focus on them even more… While all the other risks the LPs have always worried about are present, now you've got an additional regulatory risk as an LP that you have to worry about, and LPs are typically very concerned with their exposure to headline risk." In this fifth episode of the Decade of Secondaries Investing podcast miniseries, we sit down with Rozenblit and Isabel Dische, chair of Ropes & Gray’s alternative asset opportunities group, to discuss the secondaries aspects of the private fund advisers rules under the Investment Advisers Act of 1940 and Form PF rules. The pair discuss the evolution of the SEC’s focus on this small sub-asset class within the sprawling private markets landscape, what the regulator is looking out for in these transactions, and how GPs, buyers and advisers can navigate best practice as well as reputational risk that could come with these deals. For full coverage of our Decade of Secondaries Investing series, including all podcast episodes and an interactive timeline, click here. Read: "SEC votes through rules on GP-led secondaries reporting timeline" Read: "Rubber stamp speeds up market standardisation" Read: "The VSS case and the path toward best practice" Read: "Iron Road Partners: Analyst note on American Infrastructure Funds SEC charge" 

This episode is sponsored by Ares Management, Dawson Partners and Proskauer Rose The North American secondaries market remains the deepest and most active area for secondaries trading of all the global regions. Around $114 billion-worth of alternatives exposure changed hands last year and North America accounted for around two-thirds of global secondaries trading. In this fourth episode of the Decade of Secondaries Investing miniseries, we sit down with Eddie Keith, a partner and head of infrastructure secondaries in the Ares Secondaries Group; Chris Robinson, partner in the private funds group at Proskauer Rose and co-head of the firm’s secondary transactions and liquidity solutions practice; and Yann Robard, founder and managing partner at Dawson Partners, which recently rebranded from Whitehorse Liquidity Partners. The trio discuss how the North American secondaries market got where it is today, and what’s next for this crucial region. For full coverage of our Decade of Secondaries Investing series, including all podcast episodes and an interactive timeline, click here.

Single-asset continuation funds have surged in popularity in recent years. While the technology isn't new, it took persistence from secondaries market advisers to show both private equity managers and buyers that vehicles associated with the moniker 'zombie funds' could be used to keep hold of star-performing assets. Last year, single-asset continuation fund vehicles took out the largest share of GP-led transactions, accounting for around 39 percent of the $48 billion of volume seen in this part of the market, according to a year-end report from Lazard. There was "some reluctance" from secondaries buyers when conversations around single-asset continuation fund transactions began, Harold Hope, global head of secondaries at Goldman Sachs Asset Management, told Secondaries Investor. "We traditionally bought portfolios. Sometimes they were concentrated portfolios, but they were always portfolios." Today, these vehicles allow Goldman Sachs "to mitigate some of the broader risk that we face when we buy a diversified portfolio," Hope said, adding that the team is "excited about the opportunities" globally. In this third episode of the Decade of Secondaries Investing podcast miniseries to celebrate the 10 years since Secondaries Investor launched, we sit down with Hope and Holcombe Green, global head of Lazard’s private capital advisory business. They discuss how continuation fund technology was developed over time to facilitate single-asset continuation funds, and how large this pocket of the market could become as more capital is allocated to the area. For full coverage of our Decade of Secondaries Investing series, including all podcast episodes and an interactive timeline, click here.

What's in a name? The process of moving an asset or assets from an existing private markets fund into a separate structure has been happening for some time now – some say as early as 2006 and possibly even prior to that. The so-called 'continuation fund' market was worth around $40 billion last year, according to advisory estimates. Yet, this market was not always seen as a positive and constructive tool with which fund sponsors could deliver liquidity, via an option, while retaining their hold over prized assets. In the second episode of the Decade of Secondaries Investing miniseries to celebrate the 10 years since Secondaries Investor launched, we sit down with Nigel Dawn, head of private capital advisory at investment bank Evercore, and Verdun Perry, global head of Blackstone's Strategic Partners group, to discuss the evolution of the continuation fund market over the past decade and what's in store for how this tool will continue to be used. For full coverage of our Decade of Secondaries Investing series, including all podcast episodes and an interactive timeline, click here. See the PEI 300 here. Read "Single-asset CVs offer steadier returns than buyout funds – Evercore Read "How do continuation funds really perform?" Read "More LPs seek to back secondaries funds"

This episode is sponsored by Blackstone Private credit has seen significant growth over the past year, with some of the largest asset managers increasing their allocations to the sector. It comes as volatile market conditions and geopolitical tensions have plagued most industries, revealing private debt as a more secure source of capital. So, how are firms looking to take advantage of this uptick in activity? And what areas will they be focusing on going forward? In this episode, we're joined by Blackstone’s Michael Zawadzki and Brad Marshall to explore some of the trends shaping private credit and analyse what the manager’s investment strategy looks like. The podcast comes after Blackstone integrated its corporate credit, asset-based finance, and insurance groups into a single new unit called Blackstone Credit & Insurance (BXCI) in September.

On this episode, François Trausch, CEO and CIO of PIMCO Prime Real Estate, reflects on the behavior of the central banks, refinancing and the demands of decarbonization. Recorded at the PERE Europe conference as part of his keynote address, he speaks with PEI Group’s Jonathan Brasse about the outlook for the market. “I think learning to be a good investor is also learning to do nothing from time to time,” he said. “That doesn't mean [investors are] not busy… There's work to be done, and I think if the bid-ask spread is narrowing, which we're seeing, I think sales will come back and there's lots to be done in putting the same teams on the sales effort and understanding how to use the capital stack, not just you know, to do equity, but to look at more hybrid ways to invest.” Read more of PERE's coverage here