Preqin’s Secondary Market Monitor online service currently tracks 32 private equity secondaries funds in market, which are seeking to raise an aggregate $31bn from investors. This is an increase in comparison to October 2014, when 22 secondaries funds in market were seeking to raise $16bn from investors.
Among the secondaries vehicles that are currently in market, 20 are seeking to raise no more than $500mn from investors. On the other hand, there are six secondaries vehicles with a target of raising more than $1bn. The $27bn in capital being sought by secondaries funds with a target size greater than $1bn represents 87% of the total capital sought by all private equity secondaries vehicles combined.
As the secondary market has matured, the size of the largest secondaries funds has increased. In April 2015, Lexington Partners closed the largest ever secondaries vehicle raising $10.1bn for Lexington Capital Partners VIII. This represented a 44% rise on the $7bn raised by the predecessor fund in this its flagship series, the 2010 vintage Lexington Capital Partners VII.
Ardian Secondary Fund VII is the largest secondaries vehicle by target size currently raising capital. The fund is managed by Ardian and has a target of $9bn; it is yet to hold any interim closes since its launch this year. The fund includes early secondaries and co-investment components.
The second largest private equity secondaries vehicles (by target size) currently in market are Strategic Partners Fund VII and Coller International Partners VII. Strategic Partners Fund VII is managed by Strategic Partners Fund Solutions and has a target of $5.5bn. It will make opportunistic secondary investments ranging in size from $100,000 for single holdings to $1bn for portfolios of funds. Coller International Partners VII is expected to close in December 2015, also targeting $5.5bn. The fund has already secured investors such as New Mexico Investment Council and Pennsylvania Public School Employees’ Retirement System.