The first half of 2014 marked the busiest period to date for the secondary market for private equity, real estate, infrastructure and hedge funds, according to the Setter Capital Volume Report - H1 2014.
The report reveals that volume was up 47 per cent from the same period last year, driven by new and incumbent buyers who optimistically and aggressively put money to work, and the large number of sophisticated LPs who executed on opportunistic sales they had been contemplating for years.
In addition to higher dollar volumes in almost all areas, the first half saw an even greater increase in the number of transactions reflecting these same trends and the broader adoption of secondary market strategies employed by active LPs. More and more investors are becoming permanent fixtures on the secondary market, seeing it as an important portfolio management tool.
Total volume for H1 2014 was USD22 billion, while respondents alone did USD14.3 billion.
The totals breaks down as follows:
Private equity: USD16 billion – USD11.3 billion for funds, and USD4.6 billion for directs
Real estate funds: USD3.0 billion
Hedge funds: USD2.2 billion
Infrastructure funds: USD0.5 billion
Over 50 per cent of total volume was of North American focused funds, and Western European funds accounted for 31 per cent of total volume.
Some 40 per cent of volume was from European buyers, while 43 per cent of volume was from European sellers and 31 per cent of volume was of Western European assets.
Using survey recipients' projected H2 volume Setter Capital is predicting full year 2014 volume of USD45 billion, up 25 per cent year over year.