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Dry powder in private capital secondaries coffers reaches record $125B – Preqin

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Dry powder in private capital secondaries coffers reaches record $125B – Preqin

Total dry powder in the private capital secondaries market reached a record high of $125 billion as of June, whereas fundraising activity for other private capital strategies has fallen in recent months, according to the latest data from Preqin.

A total of 11 secondaries funds closed in the first half of 2020, raising an aggregate $44 billion. The three largest secondaries funds collected a total of $36 billion in capital commitments, representing 81% of the total amount raised.

The average size of secondaries funds closed during the period reached $4 billion due in part of ASF VIII, a fund managed by private equity firm Ardian, pulling in $19 billion, making it the biggest secondaries fund to date.

As of June, a total of 73 secondaries funds were looking to raise a combined $69 billion, 18 of which are focused on Europe, eight on Asia and 37 on North America.

Preqin noted that only 181 out of 1,082 potential secondary market sellers will likely sell fund interests over the next 12 months, while the remaining will take an opportunistic approach.

Preqin said "it seems likely" that more capital will flow into secondaries funds in the second half of 2020.