About 20 percent of
In addition to the copious amounts of fund interests available on the secondary market, Granoff said his firm is also looking at opportunities to acquire secondary interests in direct equity co-investments.
Noting the extraordinary interest now in secondary funds, Granoff said, “The world has changed dramatically. This is the first time that we had people cold-calling us to ask if they could invest in the fund.”
Granoff also noted Pomona Capital has been flooded with new secondary deal opportunities. “Last year we looked at over $40 billion in deal flow; this year we are on track to look at maybe $100 billion of deal flow,” he said.
Institutions like Harvard’s endowment, which was never a big seller on the secondary market, along with other significant endowments, financial institutions, pension funds, corporations and family groups have become notable sellers of private equity interests, Granoff said. Endowments have liquidity issues because many have huge unfunded commitments to private equity that render them vastly over-allocated to the asset class.
While it’s widespread in the United States, this phenomenon is also taking place in Europe, Granoff said. Pomona Capital has offices London and Hong Kong to help it source deals.
Pomona Capital closed its previous secondary fund,