By Kane Wu and Julie Zhu
HONG KONG (Reuters) -Swiss investment company Partners Group has launched another private equity secondary strategy fund worth up to $12 billion, betting on growing deal flows in the secondaries space, its chairman of Asia said on Tuesday.
The private equity secondaries market allows investors in private equity funds and private companies to make early exits to free their capital, and has become increasingly popular in recent years.
“We see much bigger deal flows on the secondaries side, which is why we just launched our number eight private equity secondary strategy (fund),” said Kevin Lu, partner and chairman of Asia for Partners Group during the Milken Institute’s inaugural Global Investors’ Symposium in Hong Kong.
“It is going to be a $10-$12 billion strategy (fund), bigger than the last fund,” Lu added.
According to data from research firm PitchBook, Switzerland-based Partners Group raised $3.2 billion and $2.8 billion for its last two secondary funds in 2020 and 2016, respectively.
Founded in 1996, Partners Group has $147 billion in assets under management spread across private equity, real estate, infrastructure, credit and secondaries globally, its website says.
The firm, which has seven offices across Asia Pacific including in Shanghai, is planning to open one in Hong Kong, said two people with knowledge of the matter who declined to be named as the information was private.
Partners Group declined to comment.
According to Lu, the slower realization in private equity as well as the rising cost of capital has pushed more funds’ investors, also known as limited partners, to resort to alternatives such as secondaries markets for exits.
“We see probably two or three times of deal flows on the secondaries side,” he said. “We will see this whole space growing.”
Lu said roughly 20% of the nearly $150 billion Partners Group managers in private markets has been deployed to secondaries transactions.
Data from Preqin showed that $23.2 billion worth of capital via 39 secondaries funds was raised globally last year, a jump from the $15.2 billion raised via 30 such funds in 2022.
(Reporting by Kane Wu and Julie Zhu; Additional reporting by Summer Zhen and Yantoultra Ngui; Editing by Christian Schmollinger, Miral Fahmy and Louise Heavens)
