Chris Witkowsky
First-time and emerging manager fundraising has slowed greatly in the tougher fundraising market, with limited partners choosing to mostly stick with their deepest relationships.
While activity on the GP-led side has been slower, several large deals have gotten done with buyers choosing to work with high-quality assets managed by firms they know well.
Jonathan Gray’s contention, that discounts on LP portfolios could increase, runs contrary to the trend this year of strengthening pricing.
Pricing for secondaries has improved to a net-asset-value level of around 90% for buyout funds.
The single-asset deal is among a slew of mid-market transactions that are keeping secondaries buyers busy, despite a slowdown earlier in the year on the GP-led side.
Until some of the more inefficient aspects of the continuation fund process are smoothed out, these deals are not likely to become routine exit options alongside IPOs and strategic sales.
Strategic Partners, formed in 2000, has grown rapidly since its acquisition by Blackstone into one of the largest secondaries buyers in the market.
For many firms, fundraising timelines have extended to 18 months or even two years, reversing the speed of fundraising in 2021 and early 2022.
The rationale for the deal is to provide liquidity to investors in older funds while still holding the assets.
The sale is being run in steps, with the first round of about $500m recently closed.
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