preqin secondary market update...the information presented in preqin secondary market update, q1...

PREQIN SECONDARY MARKET UPDATEQ1 2018

© Preqin Ltd. 2018 / www.preqin.com2

PREQIN SECONDARY MARKET UPDATE, Q1 2018

FOREWORD

All rights reserved. The entire contents of Preqin Secondary Market Update, Q1 2018 are the Copyright of Preqin Ltd. No part of this publication or any information contained in it may be copied, transmitted by any electronic means, or stored in any electronic or other data storage medium, or printed or published in any document, report or publication, without the express prior written approval of Preqin Ltd. The information presented in Preqin Secondary Market Update, Q1 2018 is for information purposes only and does not constitute and should not be construed as a solicitation or other offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or as advice of any nature whatsoever. If the reader seeks advice rather than information then he should seek an independent financial advisor and hereby agrees that he will not hold Preqin Ltd. responsible in law or equity for any decisions of whatever nature the reader makes or refrains from making following its use of Preqin Secondary Market Update, Q1 2018. While reasonable efforts have been made to obtain information from sources that are believed to be accurate, and to confirm the accuracy of such information wherever possible, Preqin Ltd. does not make any representation or warranty that the information or opinions contained in Preqin Secondary Market Update, Q1 2018 are accurate, reliable, up-to-date or complete. Although every reasonable effort has been made to ensure the accuracy of this publication Preqin Ltd. does not accept any responsibility for any errors or omissions within Preqin Secondary Market Update, Q1 2018 or for any expense or other loss alleged to have arisen in any way with a reader’s use of this publication.

p3 Fundraising

p4 Funds in Market

p5 Secondary Sellers

p7 Transactions

p8 Pricing

p9 Performance

p10 Outlook for 2018

In Q1 2018, five secondaries vehicles have successfully raised more capital than the 10 funds closed in Q4 2017 ($4.7bn vs. $3.7bn respectively). This was bolstered by the closures of Portfolio Advisors Secondary Fund III and Newbury Equity Partners IV on over $1bn

each.

At the start of Q2 2018, secondaries funds in market are seeking an aggregate $30bn. Although there are 34 secondaries funds in market, the majority (80%) of the amount sought is concentrated among seven funds (and six managers). These include Lexington Capital Partners IX, which is seeking $12bn to make it the largest secondaries fund ever closed. Investors are showing a strong appetite for secondaries, and fund managers are successfully attracting capital: 83% of funds closed in 2017 exceeded their target, and all of the funds closed in Q1 2018 exceeded their target.

The continued strong performance of secondaries vehicles relative to other strategies continues to underpin positive investor sentiment with respect to the asset class. Less than 2% of secondaries funds are currently delivering negative net IRRs, and the average median net IRR for secondaries funds across all vintages is 15.8% – this is higher than the average for all private capital funds (+13.0%).

The results of our secondary fund manager survey in January 2018 show that the secondary market is in good health: the desire for liquidity, the various portfolio management needs and a strong pricing environment drove activity in 2017, and this is expected to continue in 2018. This activity is supplemented by increasing opportunities from GP-led deals, with Q1 2018 seeing the first of this kind of transaction completed in Latin America. The majority (61%) of respondents expect to invest more capital in 2018 than they did in 2017, suggesting another active year for the secondary market.

We hope you find this report useful, and welcome any feedback you may have. For more information about Preqin’s online platform, please visit www.preqin.com or contact [email protected].

3

DOWNLOAD DATA PACK: www.preqin.com/SECQ118

FUNDRAISING

In Q1 2018, five secondaries funds held a final close, raising $4.7bn collectively,

a considerably smaller amount than the record $20bn raised by 11 funds in Q1 2017 (Fig. 1). Despite the Q4 2017 slump (when only $3.6bn was raised), 2017 was a record-setting year for the industry and, driven by the flurry of activity in both Q1 and Q3, $43bn was secured overall.

The largest secondaries fund closed in Q1 2018 was Portfolio Advisors’ Portfolio Advisors Secondary Fund III, which raised $1.5bn – exceeding its original target of $1.0bn (Fig. 4). Newbury Partners closed the second largest fund of Q1 2018, raising $1.4bn for Newbury Equity Partners IV.

All funds closed in Q1 2018 managed to exceed their original target (Fig. 2). This is a trend continued from 2017, where 83% of all funds closed above their targets, including 43% that raised 125% or more of their target. This emphasises the strong investor appetite for secondaries funds

currently, perhaps driven by the large amounts of dry powder in the industry: dry powder stands at $88bn, just below the record amount of $89bn seen in December 2017 (Fig. 3).

9% 5% 7% 5% 3%

9%10%

36%25%

10%

10%

7%

10%

3%

32% 20%

7%

45%

40%

40%

50% 55%43%

15%

43%

60%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 Q1 2018

125% or More

101-124%

100%

50-99%

Less than 50%

Source: Preqin

Prop

ortio

n of

Fun

ds C

lose

d

Year of Final Close

Fig. 2: Secondaries Funds Closed by Proportion of Target Size Achieved, 2013 - Q1 2018

23

37 36

52

4145

53 53

74

89 88

0

10

20

30

40

50

60

70

80

90

100

Dec

-08

Dec

-09

Dec

-10

Dec

-11

Dec

-12

Dec

-13

Dec

-14

Dec

-15

Dec

-16

Dec

-17

Mar

-18

Source: Preqin

Estim

ated

Dry

Pow

der

($bn

)

Fig. 3: Estimated Private Equity Secondaries Dry Powder, 2008 - 2018

Fig. 4: Secondaries Funds Closed in Q1 2018

Fund Firm Fund Size (mn) Type Geographic Focus

Portfolio Advisors Secondary Fund III Portfolio Advisors 1,500 USD Private Equity Secondaries US

Newbury Equity Partners IV Newbury Partners 1,447 USD Private Equity Secondaries US

GCM Grosvenor Secondary Opportunities Fund II GCM Grosvenor Private Markets 700 USD Private Equity Secondaries Europe

Altamar Global Secondaries IX Altamar Private Equity 541 EUR Private Equity Secondaries US

Euro Choice Secondary II Akina 300 EUR Private Equity Secondaries Europe

Source: Preqin

2

79

15

8 9

6

10

3

6

1

8 7 7 8 7

11 11

7

10

5

2.0 2.8

6.6

10.9

2.1

11.9

2.5

12.2

1.1

12.3

0.5

10.2

6.1

12.5

3.96.1

19.9

4.9

14.8

3.6 4.7

0

5

10

15

20

25

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2013 2014 2015 2016 2017 2018

No. of Funds Closed Aggregate Capital Raised ($bn)

Source: Preqin

Fig. 1: Global Quarterly Secondaries Fundraising, Q1 2013 - Q1 2018

Date of Final Close



At the start of Q2 2018, there are 34 secondaries vehicles in market seeking

an aggregate $30bn (Fig. 5). Although there are three fewer funds in market than at the start of the year, these fund are seeking more capital than in January 2018 ($21bn). Of the secondaries funds currently raising capital, 47% have held an interim close on $3.9bn collectively.

As shown in Fig. 6, the largest proportion (71%) of secondaries funds in market are primarily targeting North America, and the clear majority (86%) of capital is sought by North America-focused vehicles. There are three Asia-focused secondaries vehicles, seeking just $300mn in capital collectively.

Of the secondaries funds seeking capital, there are four dedicated real estate vehicles, targeting an aggregate $5.6bn. There is also one infrastructure secondaries vehicle in market: Stafford Capital Partner’s Stafford Infrastructure

Secondaries Fund II is seeking $276mn for investment.

The largest secondaries vehicle currently in market is Lexington Capital Partners IX which is seeking $12bn (Fig. 8); if this target

is successfully met, the amount will surpass the previous record held by a secondaries vehicle.

FUNDS IN MARKET

3228

22

32

44

3734

26 27

17

28

38

21

30

0

5

10

15

20

25

30

35

40

45

50

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Apr-18

No. of Funds Raising Aggregate Capital Targeted ($bn)

Source: Preqin

Fig. 5: Secondaries Funds in Market over Time, 2013 - 2018 (As at April 2018)

71%86%

21%

13%9%1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No. of Funds Raising

Aggregate Capital Targeted ($bn)

Asia

Europe

North America

Source: Preqin

Prop

ortio

n of

Tot

al

Fig. 6: Secondaries Funds in Market by Primary Geographic Focus

85% 80%

12% 19%

3% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No. of Funds Raising

Aggregate CapitalTargeted ($bn)

Infrastructure

Real Estate

Private Equity

Source: Preqin

Fig. 7: Secondaries Funds in Market by Fund Type

Fig. 8: Largest Secondaries Funds in Market (As at April 2018)

Fund Firm Firm Location Target Size (mn) Fund Type Fund Status

Lexington Capital Partners IX Lexington Partners US 12,000 USD Private Equity Secondaries Raising

Landmark Equity Partners XVI Landmark Partners US 4,000 USD Private Equity Secondaries First Close

Landmark Real Estate Fund VIII Landmark Partners US 2,000 USD Real Estate Secondaries Raising

Partners Group Real Estate Secondary 2017 Partners Group Switzerland 2,000 USD Real Estate Secondaries First Close

Pomona Capital IX Pomona Capital US 1,750 USD Private Equity Secondaries Raising

Source: Preqin

Prop

ortio

n of

Tot

al

5


76%70%

27%

11% 14% 11%

82% 79%

27%

15% 12%3%

Nor

th A

mer

ica

Euro

pe

Asia

Aust

rala

sia

MEN

A

Latin

Am

eric

a

Sub-

Saha

ran

Afr

ica

0%10%20%30%40%50%60%70%80%90%

2016

2017

Source: Preqin Secondary Fund Manager Survey, January 2017 - 2018

Prop

ortio

n of

Res

pond

ents

Seller Location

Fig. 11: Location of Sellers from Which Buyers Bought Fund Interests on the Secondary Market, 2016 vs. 2017

76%

49%

59%

49% 43%

16%

24%19%

11%

59%54% 51% 51%

30%

19% 16% 14% 14%

0%10%20%30%40%50%60%70%80%

Mid

-Mar

ket

Buy

out

Vent

ure

Capi

tal

Smal

l Buy

out

Gro

wth

Larg

e Bu

yout

Priv

ate

Deb

t

Nat

ural

Res

ourc

es/

Ener

gy

Real

Est

ate

Infr

astr

uctu

re

2016

2017


Prop

ortio

n of

Res

pond

ents

Fund Type

Fig. 12: Funds Purchased on the Secondary Market by Type, 2016 vs. 2017

Preqin’s survey of secondary market buyers asked respondents to identify

the perceived motivations for investors selling vehicles on the secondary market in 2017. As shown in Fig. 9, portfolio management (cited by 82% of respondents) and liquidity (the desire to realize capital from mature funds – cited by 71%) remain the main factors for investors in the decision to utilize the secondary market to sell, as they were in the 2017 survey.

Respondents were also asked to indicate which firm types they bought interests from on the secondary market in 2017. As was the case in 2017’s survey, family offices

were the main supplier of deal flow, with 69% of respondents indicating they had bought from this investor type in 2017 (Fig. 10).

North America continues to dominate secondary market activity, with 82% of respondents indicating they had bought interests from investors based there in 2017 (Fig. 11). The proportion of respondents that bought interests from Europe-based investors rose from 70% in 2016 to 79% in 2017, but the proportion of respondents buying from MENA- and Latin America-based investors fell from the previous year.

Over half of respondents bought interests in small and mid-market buyout funds on the secondary market in 2017 (Fig. 12); however, the proportion buying mid-market buyout funds has declined from 76% in 2016 to 59% in 2017. As the market continues to cater for the needs of investors diversifying their portfolio outside of private equity funds, the proportion of respondents buying interests in infrastructure funds has increased from 11% in 2016 to 14% in 2017, and for private debt funds the proportion has risen from 16% to 19% over the same period.

SELLERS

74%69%

54%

29% 29%

82%

71%

38%

12% 12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Port

folio

Man

agem

ent

Liqu

idity

Chan

ge in

Stra

tegy

Fund

Perf

orm

ance

Regu

latio

n

2016

2017


Prop

ortio

n of

Res

pond

ents

Fig. 9: Sellers’ Main Motivations for Selling Fund Interests on the Secondary Market According to Buyers, 2016 vs. 2017

66%

40%

29%37%

17%

34% 31%

20%14%

69%

44%38%

38%

34% 34%28% 22%

19%

0%10%20%30%40%50%60%70%80%

Fam

ily O

ffice

Bank

/Inve

stm

ent

Ban

k

Priv

ate

Sect

orPe

nsio

n Fu

nd

Publ

icPe

nsio

n Fu

nd

Fund

of

Fund

s/G

P

Foun

datio

n

Endo

wm

ent P

lan

Insu

ranc

e C

ompa

ny

Sove

reig

nW

ealth

Fun

d

2016

2017


Prop

ortio

n of

Res

pond

ents

Firm Type

Fig. 10: Firm Types from Which Buyers Bought Fund Interests on the Secondary Market, 2016 vs. 2017



The majority (85%) of secondary buyers indicated they had been sold funds of vintage 2009 or later (Fig. 13), perhaps illustrating the attractiveness of these funds due to the potential upside of having more time to mature. Mature funds of eight years or older, however, are still being purchased; half of respondents bought 2007/2008 vintage funds in 2017.

Preqin’s researchers maintain regular contact with investors to find out their plans for the secondary market. As at

the end of Q1 2018, Preqin has identified 851 firms that are open to selling fund interests on the secondary market in the next 12-24 months. This figure has increased from 731 investors at the end of Q1 2017. As can be seen in Fig. 14, these potential sellers represent a diverse group of investors, including public and private sector pension funds and private equity fund of funds managers. The expected sellers are concentrated in North America (41%) and Europe (39%), with expected sellers also identified in Asia (10%) and Rest

of World (9%) – including investors based in Australia, Brazil and the United Arab Emirates (Fig. 15).

The majority (60%) expect to sell buyout funds, and 40% intend to sell venture capital funds, as shown in Fig. 16. However, such a diverse pool of firms will potentially bring a variety of funds to market.

41%39%

10% 10%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

North America Europe Asia Rest of World

Source: Preqin

Prop

ortio

n of

Sel

lers

Seller Location

Fig. 15: Expected Secondary Market Sellers in the Next 12-24 Months by Location

60%

40%

29%24%

19% 18% 18%12%

5%

0%

10%

20%

30%

40%

50%

60%

70%

Buyo

ut

Vent

ure

Capi

tal

Real

Est

ate

Priv

ate

Deb

t

Gro

wth

Fund

of F

unds

Seco

ndar

ies

Infr

astr

uctu

re

Nat

ural

Res

ourc

es

Source: Preqin

Prop

ortio

n of

Sel

lers

Fig. 16: Fund Types to be Sold by Expected Secondary Sellers in the Next 12-24 Months

32% 32% 35%

50% 50%

41%

85%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2004and Older

2005 2006 2007 2008 2009 2009Onwards

Source: Preqin Secondary Fund Manager Survey, January 2018

Prop

ortio

n of

Fun

ds

Vintage Year

Fig. 13: Funds Sold to Buyers on the Secondary Market in 2017 by Vintage Year

2%2%

3%5%5%

6%6%

8%9%9%

11%13%13%

Secondary Fund of Funds ManagerGovernment Agency

Investment CompanyWealth Manager

Bank/Investment BankFoundation

Endowment PlanAsset Manager

Insurance CompanyFamily Office

Private Sector Pension FundPrivate Equity Fund of Funds Manager

Public Pension Fund

0% 5% 10% 15%

Source: Preqin

Proportion of Sellers

Fig. 14: Expected Secondary Market Sellers in the Next 12-24 Months by Firm Type

Fund Type

7


By all accounts, 2017 was a record year for the secondary market. When asked

about their overall transaction activity, 59% of respondents indicated they had spent more on secondary transactions in 2017 compared to 2016 (Fig. 17).

A sample of secondary transactions completed in Q1 2018 are shown in Fig. 18. The quarter saw the completion of a transaction that restructured three vehicles managed by Peru-based fund manager Enfoca investiones. The transaction, which had Goldman Sachs AIMS Private Equity as a buyer, is the first of its kind in Latin America, a region where GP-led secondary transactions are on the rise. Survey respondents were asked about their involvement in such deals in 2017 and, as can be seen in Fig. 19, 79% of buyers indicated they had completed a fund restructuring transaction in 2017, up from 62% in 2016.

Sixty-one percent of respondents indicated they had relied on secondary intermediaries for at least part of their completed deal flow in 2017, showing that

intermediaries remain an important aspect of the market (Fig. 20).

TRANSACTIONS

48%

62%

34%

17%21%

79%

36%

11%

TenderOffer

FundRestructuring

StapledSecondary

GPSpin-out

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2016

2017


Prop

ortio

n of

Res

pond

ents

Fig. 19: Buyers Completing Non-Traditional Secondary Transactions, 2016 vs. 2017

39%

16%

8%

16%

21%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

None Up to 25% 26-50% 51-75% 76-100%


Prop

ortio

n of

Res

pond

ents

Proportion of Total Value Sourced from Intermediaries

Fig. 20: Proportion of the Total Value of Secondary Transactions Completed in 2017 Sourced from Intermediaries

Fig. 18: Sample Secondary Transactions Completed in Q1 2018

Seller Buyer(s) Fund(s) Sold Transaction Type

UndisclosedAFP Integra, AFP Prima, AFP ProFuturo, CPP Investment Board, Goldman Sachs

AIMS Private Equity

Enfoca Descubridor 1, Enfoca Descubridor 2, Enfoca Discovery 1 Fund Restructuring

Horsley Bridge Partners Strategic Partners Fund SolutionsApax Europe VI, Apax Europe VII, Litorina Kapital

Fund IV, Segulah III, Segulah IV, Terra Firma Capital Partners II

Fund Portfolio Sale

BlackRock Private Equity Partners HarbourVest Partners Macquarie European Infrastructure Fund II Partial Sale

Pictet Alternative Advisors Undisclosed European Secondary Opportunities II Sole Fund Interest

Kaiser Permanente Pension Plan Laborers Pension Trust Fund for Northern California Infracapital Partners II, Pacific Road Resources Fund II Fund Portfolio Sale

Source: Preqin

23%

36%

21%

8%

13%

0%

5%

10%

15%

20%

25%

30%

35%

40%

SignificantlyIncreased

SlightlyIncreased

NoChange

SignificantlyDecreased

Slightly Decreased


Fig. 17: Change in Total Value of Secondary Transactions Completed by Buyers from 2016 to 2017

Prop

ortio

n of

Res

pond

ents



Recent strong fundraising and record dry powder levels have created a

very competitive deal environment. Respondents to Preqin’s secondary fund manager survey were asked for their observations on the level of competition for deals in 2017 compared to 2016: the majority (61%) indicated they had observed more competition (Fig. 21).

The perceived increase in competition is a sentiment reflected in pricing: at least half

of respondents observed higher pricing for small, mid-market and large buyout funds in 2017 compared to 2016 (Fig. 22). The majority of respondents also observed higher prices for growth and infrastructure funds on the secondary market.

Respondents were also asked to indicate the average price paid in 2017 for various fund types. As shown in Fig. 23, the highest average price tags are attached to large buyout vehicles, at 94% of NAV. Mid-market

buyout funds were bought, on average, at 92% of NAV, and venture capital funds at 80% of NAV. Despite the higher prices observed in 2017, returns expectations for deals completed that year remain broadly similar to that for deals completed in 2016: the majority of respondents (72%) anticipate multiples of 1.3-1.8x, a similar proportion for 2016 (77%, Fig. 24).

PRICING

50% 54%70%

52%32% 33%

60%

23% 27%

50% 46%25%

44%

55% 58%

33%

69% 60%

5% 4% 14% 8% 7% 8% 13%

0%10%20%30%40%50%60%70%80%90%

100%Sm

all B

uyou

t

Mid

-Mar

ket

Buy

out

Larg

e Bu

yout

Gro

wth

Vent

ure

Capi

tal

Real

Est

ate

Infr

astr

uctu

re

Priv

ate

Deb

t

Nat

ural

Res

ourc

es/

Ener

gy

Lower

No Change

Higher


Prop

ortio

n of

Res

pond

ents

Fund Type

Fig. 22: Change in Secondary Market Pricing from 2016 to 2017 According to Fund Managers by Fund Type

94%92%

86% 85%

80%

70%

75%

80%

85%

90%

95%

100%

Larg

eBu

yout

Mid

-Mar

ket

Buy

out

Gro

wth

Smal

lBu

yout

Vent

ure

Capi

tal


Aver

age

Pric

e Pa

id (A

s a

% o

f NAV

)

Fund Type

Fig. 23: Average Price Paid (As a % of NAV) for Secondaries Funds Purchased in 2017 by Fund Type

23%

38%

33%

5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

SignificantlyIncreased

SlightlyIncreased

No Change SignificantlyDecreased

SlightlyDecreased


Prop

ortio

n of

Res

pond

ents

Fig. 21: Change in Level of Competition for Deals from 2017 to 2018 According to Secondary Fund Managers

3%

43%

34%

20%

38%34%

28%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Less than1.0x

1.0-1.2x 1.3-1.5x 1.6-1.8x 1.9x orMore

2016

2017


Prop

ortio

n of

Res

pond

ents

Fig. 24: Net Multiples Expected from Deals Completed, 2016 vs. 2017

Expected Net Multiple

9


As seen in Fig. 25, secondaries funds continue to be seen as a safe

investment: only two vintages (2006 and 2009) in the 11 vintage years shown have a negative minimum IRR, and, of all secondaries vehicles, just three currently have a negative minimum IRR.

Secondaries funds typically have shorter holding periods, and, with funds purchased at discounts, provide attractive IRRs relative to other asset classes. This is illustrated in Fig. 26, which shows that median net IRRs for secondaries vehicles exceed the average private capital median net IRR for 2007 vintages onwards. Furthermore, Fig. 2 shows that secondaries funds have higher median net multiples than the average for all private capital funds for vintages 2008 and onwards.

PERFORMANCE

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Secondaries

All PrivateCapital

Source: Preqin

Med

ian

Net

Mul

tiple

(X)

Vintage Year

Fig. 27: Median Net Multiples by Vintage Year: Secondaries Funds vs. Private Capital Funds

0%

5%

10%

15%

20%

25%

30%

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Secondaries

All PrivateCapital

Source: Preqin

Med

ian

Net

IRR

sinc

e In

cept

ion

Vintage Year

Fig. 26: Median Net IRRs by Vintage Year: Secondaries vs. Private Capital Funds

-10%

0%

10%

20%

30%

40%

50%

60%

70%

2005

2006

2007

2008

2009

2010

2011

2012

2013

MaximumNet IRR

Median NetIRR

MinimumNet IRR


Fig. 25: Maximum, Median and Minimum Net IRRs of Secondaries Funds by Vintage Year

Vintage Year

Med

ian

Net

IRR

sinc

e In

cept

ion



The majority (60%) of respondents expect to be involved in more

secondary transactions in 2018 than in 2017 (Fig. 28) which, given that 2017 was a record year, bodes well for secondary transaction activity in the year ahead. Estimates for the total value of secondary transactions are shown in Fig. 29, which reveals that 41% of respondents are anticipating aggregate transaction activity of $45bn or more in 2018.

Respondents were asked to qualify these estimates by indicating which factors might stimulate secondary activity in 2018, with 26% citing pricing and 19% citing strong public market performance, which translates to better valuations for privately held assets (Fig. 30). Other factors cited included investors’ portfolio management needs as well as the desire to obtain liquidity from mature vehicles.

Respondents were also asked to indicate what trends they expected to see in 2018, and a noteworthy 42% expect to see more fund restructurings occurring (Fig. 31).

OUTLOOK FOR 2018

7%

7%

7%

11%

15%

19%

26%

0% 10% 20% 30%

Macro-economic Factors

Secondaries Dry Powder

Availability of Leverage

Liquidity/UnrealizedAssets in Mature Funds

PortfolioManagement Needs

Public MarketPerformance

Pricing

Source: Preqin Secondary Fund Manager Survey, January 2018Proportion of Respondents

Fig. 30: Fund Manager Views on Which Factors Will Influence Secondary Transaction Volume in 2018

8%

21%

42%

8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Incr

ease

dD

eal V

olum

e

Incr

ease

dPr

icin

g

Mor

e Fu

nd R

estr

uctu

ring

s

Incr

ease

d U

se o

f Lev

erag

e


Prop

ortio

n of

Res

pond

ents

Fig. 31: Fund Managers’ Expected Trends in the Secondary Market in 2018

21%

39%

32%

3%5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

SignificantlyMore

Slightly More

No Change Significantly Less

Slightly Less


Prop

ortio

n of

Res

pond

ents

Fig. 28: Fund Managers’ Expected Total Value of Secondary Transactions Completed in 2018 Compared to 2017

3%

12% 12%

32%

41%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Less than $30bn

$30-34bn $35-39bn $40-44bn $45bnor More


Prop

ortio

n of

Res

pond

ents

Fig. 29: Fund Managers’ Estimated Total Secondary Market Value for Full-Year 2018

BE SEENby thousands of investors and decision-makers around the world

CONTRIBUTEto industry benchmarks and help further research into this area

ENSUREthat the data we hold for your firm and funds is correct

REASONS TOCONTRIBUTE DATA

Contributing data is free and simple. For more information, please visit:

www.preqin.com/sharedata

GENERATEincoming leads from industry professionals seeing your profile

New York ■ London ■ Singapore ■ San Francisco ■ Hong Kong ■ Manila ■ Guangzhou

[email protected]

PREQIN

More than 60,000 alternative assets professionals rely on our global data, tools, insights and intelligence to achieve their objectives:

■ Investors: asset allocation, manager selection and portfolio management ■ Fund managers: fundraising, portfolio monitoring and investor relations ■ Service providers and advisors: business development and in-depth market knowledge ■ The wider alternative assets industry: insight, understanding and information

PREQINSECONDARY MARKET UPDATE

Q1 2018

preqin secondary market update...the information presented in preqin secondary market update, q1...

Documents