Key Takeaways
- • Partners Group launched its eighth private equity secondaries fund targeting $10–$12 billion in capital, exceeding the size of its previous secondaries vehicles ($3.2 billion in 2020 and $2.8 billion in 2016).
- • The Swiss asset manager, which oversees $147 billion globally across private equity, real estate, infrastructure, credit, and secondaries, is capitalizing on accelerating deal flows in the secondaries market driven by slower PE fund realizations and rising cost of capital for limited partners.
- • Kevin Lu, Partners Group's partner and chairman of Asia, indicated the firm expects deal flows in secondaries to increase 2–3 times, signaling substantial growth potential in the exit market for mature private equity investments.
- • Partners Group is expanding its Asia Pacific footprint, planning to open a new office in Hong Kong to support regional growth, complementing its existing seven offices across the region.
- • The secondaries market has become an increasingly critical exit vehicle as institutional investors seek liquidity alternatives to traditional fund realizations amid challenging macroeconomic conditions.
Summary
Partners Group, a Switzerland-based global investment firm managing $147 billion in assets, has launched its eighth private equity secondaries fund targeting $10–$12 billion in commitments, according to remarks by Kevin Lu, the firm's partner and chairman of Asia, at the Milken Institute's inaugural Global Investors' Symposium in Hong Kong on March 26, 2024. This new fund represents a significant scaling of the firm's secondaries platform, with the capital target exceeding its previous two secondary vehicles—which raised $3.2 billion in 2020 and $2.8 billion in 2016, respectively, according to PitchBook data.
The timing of the fundraise reflects structural shifts in private markets. Limited partners—institutional investors in private equity funds—face dual pressures: slower realizations from existing portfolio companies and elevated cost of capital. These headwinds have driven accelerating interest in secondary market transactions, which allow fund investors to exit positions early and redeploy capital. Lu noted that Partners Group is observing a 2–3 times increase in deal flows on the secondaries side, positioning the firm to capture outsized opportunity in what it views as a structurally expanding market segment.
Partners Group's broad platform—encompassing private equity, real estate, infrastructure, credit, and secondaries across global markets—positions it to source and execute complex secondaries transactions. The firm's Asia Pacific presence spans seven offices, and according to two unnamed sources with knowledge of the matter, Partners Group is planning to establish a new office in Hong Kong to deepen regional market access and client service capabilities.
The fundraise underscores growing institutional appetite for secondaries as a distinct asset class. As traditional PE fund distribution timelines extend and cost-of-capital pressures mount on institutional portfolios, secondaries vehicles offer liquidity and exposure to mature, lower-risk private equity assets at potentially attractive valuations. Partners Group's aggressive fund sizing signals confidence that this trend will persist and accelerate.
The timing of the fundraise reflects structural shifts in private markets. Limited partners—institutional investors in private equity funds—face dual pressures: slower realizations from existing portfolio companies and elevated cost of capital. These headwinds have driven accelerating interest in secondary market transactions, which allow fund investors to exit positions early and redeploy capital. Lu noted that Partners Group is observing a 2–3 times increase in deal flows on the secondaries side, positioning the firm to capture outsized opportunity in what it views as a structurally expanding market segment.
Partners Group's broad platform—encompassing private equity, real estate, infrastructure, credit, and secondaries across global markets—positions it to source and execute complex secondaries transactions. The firm's Asia Pacific presence spans seven offices, and according to two unnamed sources with knowledge of the matter, Partners Group is planning to establish a new office in Hong Kong to deepen regional market access and client service capabilities.
The fundraise underscores growing institutional appetite for secondaries as a distinct asset class. As traditional PE fund distribution timelines extend and cost-of-capital pressures mount on institutional portfolios, secondaries vehicles offer liquidity and exposure to mature, lower-risk private equity assets at potentially attractive valuations. Partners Group's aggressive fund sizing signals confidence that this trend will persist and accelerate.
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