Preqin’s Secondary Market Monitor is currently profiling 279 investors that have indicated they may sell private equity fund stakes on the secondary market. Of these, 17 have been identified as highly likely to sell fund interests on the secondary market in the coming months – those that have an immediate need to sell, often due to a desire to reduce the number of manager relationships, divert funds to new managers or to completely exit the asset class.
One such investor is Teachers' Retirement System of the State of Illinois. The US-based pension fund is believed to be looking to sell a portfolio of funds worth an aggregate $500mn on the secondary market. The funds are largely US-focused buyout funds including those managed by TPG Capital, Warburg Pincus and Elevation Partners. Park Hill Group is believed to be managing the sales process. In May 2013, the pension fund had appointed secondary intermediaries UBS Investment Bank Private Funds Group, Park Hill Group and Cogent Partners as secondary market advisers for private equity and real estate. They were to be called upon as and when the pension fund sought to sell fund interests on the secondary market.
The remaining profiled potential sellers of fund interests have indicated an interest in selling fund stakes on the secondary market typically on the condition of receiving an attractive offer for one of their stakes, or if the need arose from a portfolio management perspective. Of the total number of potential sellers, 16% are public pension funds, 11% private equity fund of funds managers and 9% are asset managers. Thirty-seven per cent are based in the US, 15% in the UK and 8% in Switzerland.