Over the past month we have seen reports of activity covering all aspects of the private equity secondary market. Morgan Stanley AIP Phoenix Global Real Estate Secondaries Fund closed towards the end of March with $370 million in commitments, exceeding its original target of $250 million. The real estate secondaries fund targets off-market secondary opportunities globally in private equity real estate funds that have a sustainable strategy for generating superior returns across real estate cycles. March also saw AXA Private Equity close AXA Early Secondary Fund IV on €546 million. It focuses on purchasing interests in immature private equity funds where less than 50% of commitments have been drawn down.
Furthermore, Royal Bank of Scotland recently decided to put its entire portfolio of private equity fund interests up for sale on the secondary market. It is considering selling its fund interests as part of a plan to shed non-core assets after losses resulting from the financial downturn. The stakes amount to approximately £658 million.
California Public Employees’ Retirement System (CalPERS) may consider selling private equity fund interests on the secondary market in order to cut the number of private equity firms it invests with and in turn reduce costs and improve returns. It is in the process of carrying out a strategic overview of its private equity portfolio so no definite decisions have been made at this stage.
The private equity secondary market is a rapidly evolving and non-transparent market. The Preqin Secondary Market Monitor provides vital intelligence for sellers, buyers and advisors.