Media coverage
Agefi Finance publishes guest article on secondaries by André Aubert and Pauline Wetter
As traditional exit opportunities have become scarcer in private equity, both investors and managers are increasingly turning to the secondary market to generate liquidity through partial sales of fund or company stakes. In a guest article published by Agefi Finance, André Aubert and Pauline Wetter, Partners at LGT Capital Partners, outline the benefits of secondaries investing.
According to André and Pauline, secondaries can offer several advantages in a broader private equity portfolio. In particular, they can complement manager selection-focused investments by providing immediate exposure to existing private equity assets, allowing for J-curve mitigation through faster deployment and distributions.
The typical secondaries cash flow pattern also offers return enhancement through compounding, as early distributions can be reinvested. Moreover, secondaries exhibit counter-cyclical properties in downward markets, as buyers can benefit from buying at a discount when taking advantage of seller liquidity needs.
Rising liquidity needs for LPs and GPs, combined with record levels of primary fundraising in recent years, are driving the increase in the secondary opportunity set. Although the deal pipeline in the secondary market has broadened and deepened, it remains important for buyers to be very selective about the opportunities they pursue, as André and Pauline highlight.
The article (in French) can be downloaded below.
