So far this year, a total of 10 private equity secondaries vehicles have held a final close, almost two-thirds of the 16 secondaries funds that held a final close in the whole of 2012. These vehicles have raised an aggregate $8.7bn, representing 42% of the total raised in 2012. The largest secondary fund to close in 2013 so far is Harbourvest’s Dover Street VIII, which this month closed on $3.6bn. It follows a similar strategy to its predecessors, purchasing stakes in venture capital and leveraged buyout funds, and portfolios of operating companies. It will also take part in synthetic secondaries in which it will aid in management-team spinoffs by giving those groups the capital needed to buy out their parents’ fund interests. While the fund will focus on the US, it will also invest globally.
The second largest secondaries fund to close year-to-date is LGT Capital Partner’s Crown Global Secondaries III, which held a final close on $2bn in February. LGT typically targets buyout and growth funds in the secondary market, with an emphasis on middle market buyout funds in Europe and the US.
The next largest fund to close is Adams Street Global Secondary Fund V. The fund seeks to invest between $5mn and $500mn in fund interests, direct secondary transactions and General Partner restructurings. Adams Street adopts a thematic approach in its secondary market activity, targeting specific funds and exposures that it believes presents the best secondary opportunities.