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The Secondary Market Buyer Universe - June 2013

by Patrick Adefuye

  • 20 Jun 2013
  • PE

Preqin’s Secondary Market Monitor has identified 729 investors interested in purchasing private equity and private equity real estate fund interests on the secondary market over the next 24 months. Twenty-two per cent of these have indicated that they are highly likely to purchase an interest on the secondary market over that time frame.

Of those interested in the secondary market, private equity fund of funds manager represent the largest proportion at 25%. This is followed by public pension funds, which constitute 14% of the total number of investors interested in the secondary market and then private sector pension funds at 9%. Secondary fund of funds managers constitute just 5% of the total investors interested in buying fund interests on the secondary market.

Private equity fund of funds managers are an important contributor of capital for purchasing fund interests on the secondary market. Some (primary) private equity fund of funds managers include an allocation to the secondary market; of the fund of funds vehicles that held a final close in 2012, 54% either included a specified allocation to the secondary market or intended to invest in the secondary market on an opportunistic basis. Furthermore, some private equity fund of funds managers also raise capital for vehicles dedicated to investing on the secondary market as part of their activity, supplementing the capital raised by secondary fund of funds managers.

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