LP Sales

Recent weeks have seen a surge of LP portfolio sales that some believe will swell into a wave of transactions.

The portion of LPs looking to back secondaries funds is only increasing as investors seek ways to turn negatives into positives in the current crunch.

Secondaries funds of vintage 2019-21 will see significant impacts on their internal rates of return, Vincent Gombault has warned.

A fundamental shift in capital markets is forcing many institutional investors to rethink their portfolios, creating a perfect storm for the resurgence of investor-led secondaries.

LP sales were expected to kick off a resumption of robust secondaries activity after a slowdown late last year, with external factors such as the collapse of Silicon Valley Bank keeping activity muted.

PEI’s annual investor survey indicates that LPs aren’t rushing to exit every deal, but they do expect third-party valuations.

LP portfolios accounted for close to half of the roughly $106bn in volume last year, according to the advisory firm and placement agent's 2023 Secondary Market Overview.

Investment officer Pushpam Jain says the pension’s exposure to commodities alerted it to opportunities in farmland markets it had tracked since 2018, which ultimately led to more than $500m in TIAA secondaries deals.

The 2018-vintage Global Growth Fund III has invested in companies including SHEIN, Bytedance and crypto exchange FTX.

The LP portfolio sale was among a slew of such deals launched since last year that managed to close despite pricing uncertainty and hesitation among LPs to sell at discounts.