"The secondary market has become a mainstay for investors, both as 1) more investors move into the secondary market and, 2) as a way to manage investors' existing private portfolios. Both sides of the market are growing tremendously—2021 is on track for a record year," said Commonfund Capital’s Head of Secondaries, Cari Lodge in her recent panel discussion hosted by Harvard Business School.
As the private equity market evolves and experiences explosive growth, so does the secondary market as Limited Partners redefine their portfolios and priorities in the backdrop of new economic realities. Though private equity secondary transaction volume was impacted by the COVID-19 crisis in early 2020, the market has rebounded, supported by GP-led transactions. Some experts have even projected the annual secondary volume could reach $250 billion in the next 5 years as limited partners more actively manage their portfolios.
Cari Lodge was joined by Gerald Cooper of Campbell Lutyens and Hemali Dassani from Harvard Business School in a discussion on trends in the growing secondary market and what they see as solutions that the bespoke market can present to General Partners. Other than a direct sale of a fund’s remaining assets to a secondary investor, these GP-led secondary transactions that continue to impact the market include GP-led tender offers, fund restructurings and stapled secondaries. The panelists also discussed how intermediaries from LPs, GPs and Placement Agents work together to create symbiotic, long term relationships with objectives of further growing the private equity market.