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Liquid Illiquidity

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April 2, 2015

Preqin has the latest data on trends in secondary investments, reporting that secondaries are more popular than ever. There is apparently plenty of capital available to pay and willingness to pay more for secondaries, and this is true both on a dollar basis, as well as on a percentage to NAV basis (given that NAVs are also rising). Over the past decade secondaries have gone from the market of “last resort” for distressed investors seeking liquidity to a regular part of the arsenal of tools available for asset managers to keep the portfolios balanced and benchmark compliant. Preqin says that the “majority of managers” in its latest survey are looking to invest more capital in secondary opportunities this year, and many are looking to draw on more debt financing to use in the secondary market. The report also reveals the hottest and most frequently traded buyout funds, most of which are European, reflecting the favorable returns that European PE has delivered in the past. Topping the list are vintage funds from Apax, BC Partners, Bridgepoint, Cinven, and Charterhouse. (Image source: Preqin).

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