Secondaries funds have become an attractive investment opportunity for investors that are looking to diversify their investment portfolios and for those that are seeking more immediate returns through the mitigation of the J-curve effect, particularly if stakes are purchased at a significant discount to net asset value (NAV). Perhaps it is for these reasons that almost a quarter (21%) of LPs tracked by Preqin have a preference for secondaries vehicles.
Preqin’s Secondary Market Monitor currently tracks 38 private equity secondaries funds in market, which are seeking to raise an aggregate $26bn from investors. The table below shows the top 10 largest secondaries vehicles currently in market, which are looking to raise an aggregate $21bn. In terms of geographic preference, two-thirds of secondaries funds in market plan to primarily acquire stakes in North America-focused funds, 24% are targeting Europe-focused opportunities and the remainder are focusing on opportunities in Asia.
With a target size of $5bn, Goldman Sachs AIMS Private Equity’s Vintage Fund VII is the largest private equity secondaries vehicle currently in market. The fund is expected to use the secondary market to acquire interests in buyout and special situations funds focused on developed markets, while also looking to acquire direct stakes in private equity management companies.
The second largest fund currently raising capital is Landmark Equity Partners XVI. The fund, managed by Landmark Partners, is seeking $4bn to purchase buyout fund stakes focused on North America and Europe.
For more detail on the largest secondaries funds in market and more information on secondaries fundraising, buyers, sellers or performance, please log in to Preqin’s Secondary Market Monitor, or contact us at firstname.lastname@example.org.