06
LP-led transaction activity analysis
Type of sellers in 2022 and 2021¹
- Split by transaction value (purchase price plus unfunded) per respondent
- Public pensions saw their share of LP-led deals increase 9 percentage points or nearly $2 billion compared to last year — the greatest year-over-year change of any seller and highlighting the strength of the denominator effect in driving sales of LP-stakes as investors rebalance their portfolios.
- Corporate pension, insurance companies, and sovereign wealth funds were also particularly active sellers, all exhibiting a growing share of the overall market. The sharp public market correction last year created a strong demand for liquidity and portfolio management.
- In contrast, asset management firms, financial institutions, and family offices — facing less acute liquidity demands and fewer rigid asset allocation rules — saw their relative market share of transaction volume fall year-over-year.
Strategy of funds sold in 2022 and 2021¹
- Split by transaction value (purchase price plus unfunded) per respondent
- For the third year in a row mega buyout and middle market buyout accounted for at least two-thirds of the funds sold in the market, with mega buyouts last year showing a 7% increase while middle market buyouts fell by the same amount year-to-year. The heightened demand for mega buyout funds in 2022 follows a trend of secondary buyers gravitating towards funds managed by familiar GPs with a track record of navigating economic cycles.
- Growth equity and venture transaction activity meaningfully declined (both by at least 25%) as public markets for technology assets collapsed. There was considerable difficulty in executing these transactions as buyers required substantial discounts to GP recorded valuations to reflect public market write-downs.
- Credit and infrastructure saw little or no change in their market share, which reflected their structural advantages and resiliency in the face of tough economic conditions.
Type of sellers in 2022 and 2021¹
- Split by transaction value (purchase price plus unfunded) per respondent
- Public pensions saw their share of LP-led deals increase 10 percentage points or nearly $2 billion compared to last year — the greatest year-over-year change of any seller and highlighting the strength of the denominator effect in driving sales of LP-stakes as investors rebalance their portfolios.
- Corporate pension, insurance companies, and sovereign wealth funds were also particularly active sellers, all exhibiting a growing share of the overall market. The sharp public market correction last year created a strong demand for liquidity and portfolio management.
- In contrast, asset management firms, financial institutions, and family offices — facing less acute liquidity demands and fewer rigid asset allocation rules — saw their relative market share of transaction volume fall year-over-year.
Strategy of funds sold in 2022 and 2021¹
- Split by transaction value (purchase price plus unfunded) per respondent
- For the third year in a row mega buyout and middle market buyout accounted for at least two-thirds of the funds sold in the market, with mega buyouts last year showing a 7% increase while middle market buyouts fell by the same amount year-to-year. The heightened demand for mega buyout funds in 2022 follows a trend of secondary buyers gravitating towards funds managed by familiar GPs with a track record of navigating economic cycles.
- Growth equity and venture transaction activity meaningfully declined (both by at least 25%) as public markets for technology assets collapsed. There was considerable difficulty in executing these transactions as buyers required substantial discounts to GP recorded valuations to reflect public market write-downs.
- Credit and infrastructure saw little or no change in their market share, which reflected their structural advantages and resiliency in the face of tough economic conditions.
Please contact us should you have any queries or wish to find out more about Campbell Lutyens’ secondary advisory practice. In addition click here for important information regarding the report.
