Stanford Management Company is set to take the largest offering of illiquid assets in history to the private equity secondary market. The $12.6 billion endowment has hired the Dallas-based secondary market intermediary Cogent Partners to assist with the sale of private equity and private equity real estate fund interests from its alternative investment portfolio.
The portfolio consists of $13 billion in commitments to what the endowment considers to be illiquid funds, with $6 billion of that figure having already been drawn down. Approximately 80% of the offering includes interests in private equity vehicles, including mid-size and large buyout, venture capital and distressed debt funds. The offering also includes stakes in forestry and real estate funds.
This would not be the first time the endowment has come to the secondary market with the objective of achieving liquidity. In Q1 2009, Stanford Management Company looked into the possibility of selling approximately $2 billion of private equity fund interests on the secondary market that consisted primarily of undrawn commitments. Secondary market buyers were asked to buy into the undrawn funds through a structured vehicle, however, it failed to attract much interest.
Cogent Partners is inviting potential buyers to bid on any part of the alternative investment portfolio until 27th October 2009. Cogent is then expected to match potential buyers with combinations of fund stakes before taking any formal offers. It is likely that the fund interests will be sold to a number of different buyers.
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