News Digest: LP secondaries could take centerstage in 2023
January 13, 2023
Limited Partners offered more and sold less in the ‘secondaries’ market deals last year while the LP portfolio sales overshadowed GP-led processes including single asset continuation funds for the first time since 2019, says Jeffries in a report.
Total secondaries volume stood at $108 billion, which was lower than the $132 billion recorded in 2021. In spite of the slowdown, 2022 remained the second busiest year on record for the strategy and volumes could have matched those of a year ago but for the constant decline in prices as the year progressed.
Meanwhile, market dynamics helped push LPs centerstage with about $56 billion in volumes as institutions dealt with overexposure to this asset class. They also contended with diminishing distributions that resulted in decelerating the exits from GPs.
The Jeffries report says market professionals are anticipating a record year in 2023 due to pent up demand that would potentially burst through pricing hesitations.