News Digest:

Private equity secondaries are seeking larger deals in the market for which they are expanding their presence across continuation funds through fresh investments. A report says the investor class is exploring co-investments to expand the size of their equity holdings.

According to the report, secondaries are seeking larger deals and expanding their war chests to enhance their leverage during negotiations and to mitigate syndication risks. On their part, LPs including sovereign wealth funds and insurance companies, are keenly following them and participating in continuation funds alongside secondaries.

Takeaway:

As per the Pitchbook 2023 Annual Global Private Market fundraising report, the value of the secondaries closed in 2023 at $78.3 billion, which makes it the second-highest level achieved over the past decade. Secondaries typically cap their exposure in a company to between 1% and 2.5% of their total fund commitments.

End Notes

Source: https://pitchbook.com/news/articles/secondaries-firms-expand-continuation-funds