Last week in our special series on private equity secondaries, we discussed how GPs are leveraging newly developed liquidity in that market to manage funds and assist their LPs with their specialized investment needs. Given today’s challenged capital markets it’s also tougher to extract expected values from your best properties.

Sponsors are looking inwards and leaning into “know what you own,” our head of secondaries, Nick Lawler, tells us. They can raise incremental capital, continue investing in and owning a “trophy” asset, while not breaching concentration limits in a traditional fund structure (usually set at 15-25% of a fund’s total cost basis). Secondary trades enable the fund to not have an overly elongated hold.

A core element of CVs is optimal alignment of interests between the GP and their LPs. Active PE partners are required to roll 100% of their carried interest and GP commitment associated with the assets as their commitment going into the CV...

“I think they still have another hike in them at some point, just because there is still more momentum in underlying inflation than we expected at this point in the cycle.” – Kristin Forbes, professor of management and global economics, MIT Sloan School of Management.

Featuring Charts

Chart of the Week: Bonds Away

September 28, 2023

The popularity of secondary equity investments has risen markedly since 2016.

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Chart of the Week: Who’s Leading What

September 15, 2023

The popularity of secondary equity investments has risen markedly since 2016.

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Chart of the Week: Primacy of Secondaries

September 7, 2023

The popularity of secondary equity investments has risen markedly since 2016.

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Chart of the Week: High Grade Problem

August 15, 2023

Investment grade bond issuers are paying more, but activity remains strong.

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Chart of the Week: Steady as She Grows

August 8, 2023

The Fed’s hawkish rate regime has tamed the higher pace of US economic growth.

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Chart of the Week: Indexed Returns

August 1, 2023

Almost two decades of data show strong junior capital returns relative to other credit.

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The Pulse of Private Equity – 9/25/2023

Another strong year for private debt Download PitchBook’s Report here. Private debt fundraising is off to a strong start, according to PitchBook’s just-released H1 2023 Global Private Debt Report. At halftime, almost $95 billion has been raised across 74 funds. That pace is ahead of last year’s, which makes us confident that fundraising will eclipse $200…

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Leveraged Loan Insight & Analysis – 9/25/2023

 How does the US middle market characterize the quality of 3Q23 deal supply?  Finding quality opportunities to put money to work has been one of the main challenges faced by middle market lenders this year.  However, it seems that things could be improving on this front.  When asked how they would characterize the quality of…

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Private Debt Intelligence – 9/25/2023

Q3 private debt fundraising in North America hits twelve month high Aggregate capital raised in North America has hit $34.8bn in Q3 year-to-date (YTD), the highest it has been since Q2 2022, which achieved a near record breaking $52.8bn. The number of funds closed during the third quarter so far remains average for the year…

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PDI Picks – 9/25/2023

Fundraising down, but hopes are up Private debt looks well placed to prosper, despite what has been a difficult period for investors. Three years ago, Private Debt Investor launched a cross-asset class survey called the Fund Leaders Survey comprised of more than 100 senior buyout, growth, private debt, venture capital, real estate and infrastructure executives….

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The Pulse of Private Equity – 9/18/2023

Middle market deal activity Download PitchBook’s Report here. The middle market is humming along, according to PitchBook’s latest US PE Middle Market Report. Through June, about $214 billion has been invested across 1,635 deals. Both figures are slightly under last year’s pace but still ahead of the pre-COVID years. Middle market companies are being wooed by…

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