Despite the influx of non-traditional buyers, the traditional players are likely to continue dominating the secondary market. They have the capacity in terms of expertise and capital available for secondary investments to purchase the larger portfolios, putting them at an advantage in the bidding process. Preqin’s Secondary Market Monitor tracks the top secondary market buyers by the total number of funds raised for secondary investments over the last 10 years.
The biggest secondary market investor in terms of funds raised is Lexington Partners. It is estimated to have raised around $14 billion over the last 10 years. The secondary fund of funds manager is known to have taken part in a number of large secondary transactions, including purchasing a portion of CalPERS’ $2.1 billion legacy portfolio in 2008. Lexington recently closed its latest secondaries vehicle after collecting $7 billion from investors, so will continue to be a significant player in the market in the year ahead.
Having raised approximately $11.9 billion for secondary investments over the last 10 years, Goldman Sachs Private Equity Group is also one of the top secondary market investors. The private equity fund of funds manager invests in the secondary market through its fund of funds vehicles and its dedicated secondaries vehicles. One of the most recent secondary purchases known to have been made by the manager was earlier this year when it placed the winning bid for Alberta Investment Management Corporation's portfolio of private equity fund stakes.