Potential Secondary Market Sellers - June 2012

by Antonia Lee

  • 14 Jun 2012
  • PE

Preqin's Secondary Market Monitor contains profiles for 286 investors known to be actively looking to sell private equity or real estate interests on the secondary market. The Secondary Market Monitor enables users to filter from investors profiled on Preqin’s Investor Intelligence database over 1,800 investors identified by Preqin as having an increased likelihood of selling fund stakes on the secondary market. These LPs are either no longer investing, over-allocated to the asset classes, or have otherwise put their private equity or real estate investments on hold.

North America-based institutions represent 42% of all investors that are no longer investing, have put investments on hold, or are over-allocated to private equity or real estate. European LPs also make up a considerable proportion at 38%, and investors located in Asia and Rest of World form the smallest portion, with 20% of all potential sellers located in this region.

In regards to firm type, banks and investment banks and private sector pension funds make up the largest proportions of institutions that are potential sellers on the secondary market, with these institution types representing 12% of such investors. Corporate investors follow closely behind at 11%.

One example of an institution that is no longer investing in private equity funds and is now looking to sell off some of its private equity exposure is City National Corporation. The US-based bank is considering selling off its private equity fund investments on the secondary market following legislative changes put in place that prevent it from investing within the asset class.

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