Europe-Based Investors’ Appetite for Purchasing Fund Interests on the Secondary Market

by Katie Edwards

  • 06 Jan 2016
  • PE

Preqin’s Secondary Market Monitor currently tracks 313 Europe-based investors that have an interest in acquiring stakes in private equity vehicles via the secondary market. These investors represent 39% of all LPs currently considering purchasing funds on the secondary market and have aggregate assets under management of $8.4tn.

As shown in the chart below, private equity fund of funds managers make up the largest proportion (22%) of Europe-based investors with an interest in buying on the secondary market. Private sector pension funds (13%), public sector pension funds (11%), insurance companies (9%) and asset managers (9%) also represent significant proportions of Europe-based secondary market buyers. UK-based investors constitute the largest percentage of these investors (27%), with Switzerland (17%), Germany (12%), Netherlands (8%) and France-based investors (7%) also representing sizeable proportions.

Of the Europe-based investors that have stated a fund type preference when buying on the secondary market, 54% seek to acquire fund interests in buyout vehicles, 45% seek interests in real estate funds and 29% have an interest in purchasing stakes in venture capital vehicles. Growth (25%), mezzanine (11%) and special situations vehicles (8%) are also among the list of private equity fund types that Europe-based investors are actively looking to purchase on the secondary market.

AlpInvest Partners is one of the largest Europe-based investors looking to purchase private equity fund interests on the secondary market in the next 12 months. The $42bn private equity fund of funds manager will look to acquire fund stakes in buyout, venture capital, mezzanine and growth vehicles on the secondary market on a global scale. Transactions may cover either the acquisition of a single LP stake in one fund or a portfolio of stakes in multiple funds. AlpInvest Partners, which is headquartered in Amsterdam, seeks to deploy between $1bn and $1.5bn in the secondary market on an annual basis.

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