ONE of the world’s biggest private equity (PE) companies, Swiss-based Partners Group, pumped in US$3.2 billion (S$4.3 billion) into PE secondary investments on behalf of its clients last year, a 113 per cent jump from US$1.5 billion in 2023.
The Swiss-based company said on Tuesday (Feb 11) that it completed 25 such investments last year. More than 80 per cent of the total funds invested went to portfolios led by limited partners (LPs) – investors in PE funds who provide the capital, but have no management control.
Secondary PE deals are those in which existing investors sell their stakes to new investors. They also refer to sales of a company stake to a new fund arranged by a PE firm.
Global activity in such deals, in what was previously a niche market, has surged in the past few years, as higher interest rates and a slowdown in dealmaking are squeezing the US$4 trillion buyout industry.
A report by US investment bank Jefferies Group last month said that the global PE secondary market transaction volume rose 45 per cent year on year to a record high of US$162 billion in 2024.
“We expect another strong year in the secondaries space, with the market continuing to provide a range of liquidity options for LPs,” said Anthony Shontz, partner and co-head of private equity partnership investments at Partners Group.
Partners Group isn’t alone in its bullish outlook. In its report, Jefferies said it expects “that growth will continue in 2025, propelled by a strong supply of….transactions matched with significant demand and a well-capitalised buy side.”
The year also kicked off with the largest-ever secondary market fundraising globally, at US$30 billion by French PE group Ardian last month.
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