Of the 300 private equity investors currently tracked by Preqin with an interest in selling private equity fund interests on the secondary market, 102 (34%) are headquartered in the US and Canada. This group of 102 LPs consists of a range of investor types, including pension funds (30%), foundations (16%), endowment plans (12%) and private equity fund of funds managers (11%), and have aggregate assets under management of $6.4tn.
The largest US-based LP which looks to sell its existing private equity fund interests on the secondary market is JPMorgan Chase, which has $8.7bn of its $2.4tn assets under management currently allocated to private equity. The bank is looking to reduce its exposure to the asset class in order to adhere to the new restrictions that will be enforced when the Volker Rule comes into effect. JPMorgan Chase’s private equity portfolio mainly consists of fund interests in US-focused buyout vehicles, although it also has exposure to other fund types on a global scale.
Ontario Municipal Employees Retirement System (OMERS) is the biggest Canada-based investor with an interest in selling existing private equity fund stakes on the secondary market. The pension fund has CAD 60.8bn assets under management, with CAD 6.5bn currently allocated to private equity investments. OMERS is looking to reduce its exposure to external fund managers, and is therefore actively pursuing opportunities to sell off some of its private equity portfolio on the market. Its portfolio is made up of a range of globally focused fund types, including buyout, venture capital, fund of funds and mezzanine vehicles.