Secondary investments have gained increasing sophistication, interest and traction as 'more capital was closed on for Private Equity Secondaries in the first quarter of the year than for any other strategy outside of buyouts'. The first quarter of 2023 is evidence of the strength of the strategy as fundraising has superseded past figures. Having been somewhat of a back-runner, investors have seen the opportunity that Secondaries investments present as a wholly differentiated strategy. Capital allocations have been steadily shifting towards Secondaries as industry leaders such as BlackStone, Ardian and Lexington Capital Partners continue to materialise their growth plans across the market.
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The Evolution of Secondaries:
Dedicated secondaries vehicles focusing on private equity accounted for almost one fifth of the $163.9 billion raised for private equity in the first quarter of this year, according to affiliate title Private Equity International data. In the same period last year, secondaries funds accounted for just 2 percent of capital raised.
The amount of capital raised by secondaries funds jumped almost 1,000 percent year-on-year, compared with the $2.8 billion raised on the first three months of last year.
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