Secondaries is key for GPs reshaping investment strategies

The secondaries market will remain a key mechanism for investors looking to adapt to the ongoing macroeconomic and geopolitical challenges, according to Coller Capital’s founder and chief investment officer Jeremy Coller.
“As private market investors and fund managers assess the risks and opportunities of the current environment, reshaping investment approaches and portfolios will be a priority for many,” Jeremy Coller wrote in the firm’s latest annual report for the year ending 31 March, 2024. He added that the secondaries market “remains the key mechanism for facilitating these changes at speed” and that the firm stands to benefit from the changes.
In the report, dated 18 July and filed with the UK’s Companies House last month, Coller expressed optimism for the secondaries market while assessing macroeconomic risks for the firm in 2024.
There were indications that “the worst-case scenario of a long and deep global recession” would be avoided despite the continued uncertainty about interest rates and political elections in major economies, he added.
Coller Capital is in market with its ninth secondaries flagship, Coller International Partners IX, which launched in 2022 with a $10 billion target. The fund has raised at least $5.5 billion, according to Secondaries Investor data.
Coller is also raising its second credit secondaries fund, Coller Credit Secondaries – Opportunities Fund II, which launched in 2023 with a $2 billion target. The firm expects the overall value of the funds sponsored or advised by the firm to increase as it continues to raise for its ninth flagship and credit vehicle, Jeremy Coller noted in the report.
Pricing for GP-led deals rebounded in the second half of 2024, which led to an increased focus on the GP-led market as managers sought to extend the hold of prized assets through continuation vehicles, Coller added.
“[We] expect the strong demand for high-quality buyout assets coupled with the constraint of traditional exit routes to lead to continued growth in GP-led volume in 2024, particularly given the increased GP focus on providing liquidity to investors.”
The secondaries veteran’s expectation matches with full-year estimates by Evercore. GP-led deals reached a record high of $71 billion last year, up from $51 billion in 2023 and $48 billion in 2022, according to Evercore’s FY 2024 Secondary Market Review. It was slightly above the previous record of $68 billion registered in 2021. Total secondaries deal volume also hit an all-time high of $160 billion last year, according to Evercore’s estimates.
“GP-led deals in 2024 demonstrated greater sophistication, with features such as concurrent refinancings and dual-track processes to balance liquidity needs with long-term value creation,” Evercore noted. “Sponsors and investors collaborated closely and innovatively to address valuation gaps and pricing challenges, reflecting the market’s continued evolution.”
Jeremy Coller said he believes credit secondaries would benefit from the new interest rate regime in 2024 amid increasing demand for liquidity in the credit market.
“‘Higher for longer’ interest rates became all too familiar concept in 2023, curtailing traditional lending activity,” he wrote. “This partly led to favourable demand/supply dynamics for private credit, which was well positioned to fill the lending void left by traditional lenders, and to address the financing needs of various borrowers – including private equity sponsors.”
Jeremy Coller will be a featured speaker at PEI’s NEXUS 2025 conference in March which will feature an extensive line-up of GPs, LPs and secondaries content.
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