07
Secondary buyer target returns analysis
Movement in weighted average midpoint of respondent’s strategy target returns between H1 2023 and FY 2022
Net IRR
Net Multiple
On the LP-led side, buyout returns were largely stable from the end of 2022 to H1 2023, as these types of assets continued to be the bread and butter of secondary buyers’ deployment activities. Underwriting targets for venture have continued to become stricter as underlying valuations were viewed as rich. Changes in infrastructure returns may have been influenced most by stabilized interest rates, which serve as a benchmark for investors.
Secondary buyer target returns experienced a meaningful change with a divergence between SACF and MACF. Investors have been more opportunistic in SACFs given the availability of more diversified exposure, which has pushed them to higher expected MOICs for concentrated investments. Lower MOICs on MACFs signal a pent-up demand from the market to deploy into portfolios with multiple assets as this type of exposure has been challenging to source.
Movement in weighted average midpoint of respondent’s strategy target returns between H1 2023 and FY 2022
Net IRR
Net Multiple
On the LP-led side, buyout returns were largely stable from the end of 2022 to H1 2023, as these types of assets continued to be the bread and butter of secondary buyers’ deployment activities. Underwriting targets for venture have continued to become stricter as underlying valuations were viewed as rich. Changes in infrastructure returns may have been influenced most by stabilized interest rates, which serve as a benchmark for investors.
Secondary buyer target returns experienced a meaningful change with a divergence between SACF and MACF. Investors have been more opportunistic in SACFs given the availability of more diversified exposure, which has pushed them to higher expected MOICs for concentrated investments. Lower MOICs on MACFs signal a pent-up demand from the market to deploy into portfolios with multiple assets as this type of exposure has been challenging to source.
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