02 │ Dedicated secondary buyers
Dry powder up 20% YoY totaling $174 billion at the beginning of the year.
Breakdown of dry powder from dedicated secondary funds¹
- At the beginning of 2024, available dry powder from dedicated secondary funds was approximately $174 billion, up over 20% from the beginning of 2023 ($143 billion).
- The average amount of dry powder by buyer increased by 23% YoY, on the back of strong fundraising.
- Close to 40% of the dry powder consistently sits with the mega-sized secondary funds. However, funds with $5-10 billion of dry powder made up almost twice as much of the outstanding capital available to deploy than in 2022.
- The smallest secondary investors (those with less than $2 billion of dry powder) grew in number highlighting, competitive dynamics at the lower end of the market where there are inherently more players.
Dry powder classification by total dry powder dollars
Dry powder classification by number of investors
- Represents dry powder from dedicated secondary funds, side pockets and institutional secondary dry powder available for use today. Excludes leverage.
- Please note CL is using an expanded definition of dry powder, which differs from that shown in prior years’ reporting. Beginning of Q1 2023 and Q1 2024. Based on secondary survey data and CL market knowledge.
Average transaction size was down in 2023, but volume was driven by a 50% increase in the number of deals by large secondary buyers.
Composition of market transaction volume
- The market continued to be concentrated with the largest buyers – those with dry powder >$5 billion completing 62% of the transaction volume in 2023, despite that representing only 30% of the number of deals. However, the smallest groups with <$2 billion of dry powder continue to drive a lot of the activity in the market, as shown by them comprising 62% of transactions by number in 2023, a constant from 2022.
- Average transaction sizes decreased largely across the board, going from $294 million to $215 million for the largest groups and $39 million to $28 million for the smallest ones. The largest groups above $10 billion of dry powder compensated for this by closing 14 more transactions on average compared to 2022.
Average transaction size and deals closed
By amount transacted($), 2023
By number of deals, 2023
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