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Laxman Pai, Opalesque Asia: Seven private equity secondaries funds secured an aggregate $2.4bn in H1
2019, representing a 71% decrease from H1 2018 when $14bn was raised
from 23 secondaries funds.
Preqin Secondary Market Update pointed out that although this represents
a notable decline, it's partly due to the cyclical fundraising
environment, as a large proportion of prominent secondaries fund
managers held final closes for their dedicated vehicles between 2017 and
2018.
With two of the largest ever secondaries funds currently in the market
and yet to hold a final close, the low fundraising figures for the first
half of the year belie the true state of the market, which is strong and
healthy going into H2, it said.
According to Preqin, fundraising has steadily increased over the past
consecutive years. Although the average size of secondaries funds closed
in H1 2019 is less than half that of funds closed in 2018, a large
proportion of vehicles currently in the market have much larger target
sizes in comparison to previous years.
Once these funds hold a final close, average fund size is expected to
increase again.
Large funds are in market
"As we head into H2 2019, there are 51 secondaries vehicles in the
market, seeking a combined $77bn in the capital," Preqin said.
Compared with the start of 2018, the number and aggregate target size of
funds in the market are up by 14 and $56bn respectively.
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