Secondary Funds are Leading the Pack
Brianne Lynch (EquityZen)
|
May 31, 2023
Summary of the Article:
- despite a dramatic decline in primary rounds fundraising, the private market secondaries are forking a new raising trend.
- According to Pitchbook’s Q1 2023 Global Private Market Fundraising report, “Only a quarter into 2023, secondaries fundraising has already hit 66.5% of 2022’s $46.2 billion total, with $30.7 billion raised by 12 funds
- Private market secondaries are creating an active market for investors and shareholders in the absence of new primary funding rounds or exits
- institutional sellers are generally grouped into two major categories: (i) investment managers who need to return capital to their limited partners, and (ii) limited partners are reliant on returned capital to reinvest in new vintages where they have committed capital.
- For new investors, the thesis for secondary market investing is as strong as ever: private companies are trading at sizable discounts to their latest primary funding rounds on the secondary market, creating a potentially attractive entry point for new investors.
Brianne Lynch (EquityZen)
|
May 31, 2023
Summary of the Article:
- despite a dramatic decline in primary rounds fundraising, the private market secondaries are forking a new raising trend.
- According to Pitchbook’s Q1 2023 Global Private Market Fundraising report, “Only a quarter into 2023, secondaries fundraising has already hit 66.5% of 2022’s $46.2 billion total, with $30.7 billion raised by 12 funds
- Private market secondaries are creating an active market for investors and shareholders in the absence of new primary funding rounds or exits
- institutional sellers are generally grouped into two major categories: (i) investment managers who need to return capital to their limited partners, and (ii) limited partners are reliant on returned capital to reinvest in new vintages where they have committed capital.
- For new investors, the thesis for secondary market investing is as strong as ever: private companies are trading at sizable discounts to their latest primary funding rounds on the secondary market, creating a potentially attractive entry point for new investors.
