The secondary market has been hailed as the “big winner” for private equity investment opportunities.
Although the general fundraising environment was likened to a “desert”, ’secondaries’ were singled out as the growth area for capital raising at the EVCA Investors’ Forum in Geneva.
These entail the purchase of original investors’ stakes in private equity funds and the acquisition of company portfolios from corporate or institutional owners.
Thomas McComb, portfolio manager at JP Morgan Asset Management, explained: “I think in my view the one big winner has been secondary funds and opportunities.
“Post 2009 it has been pretty successful with capital raising, the transactions have continued to grow.
“Due to liquidity issues there’s going to be bank and insurance-selling positions.
“Agents in that area will have a good run and will continue to do so.”
McComb’s views on the emerging strength of the secondary market were also shared by Tatiana Chopova, partner at AlpInvest Partners N.V.
She said: “We have been very active in the secondary market. LPs will not just accept walking debt and so they will become more active – they have been trying to find solutions in the secondary market.”