General partner-led secondaries deals – when an asset or portfolio of assets is purchased from one fund and put into a new vehicle – are set to increase as the coronavirus pandemic pushes more buyout groups to find ways to hold on to good assets and provide much-needed liquidity to limited partners.
In this article by Private Equity News, Dan Aylott, Managing Director at Cambridge Associates discusses why restructuring activity could also increase because funds that are coming to the end of their lives are having a more difficult time exiting their last remaining assets in the current environment.
“GPs may look to rethink their recycling provisions, and look for innovative ways to allow them more runway and invest more capital in existing portfolios,” Aylott said, adding: “LPs really need to be focused and engage with GPs early to find out what their plans are. Not all GP-led deals are done with the best interest of LPs in mind. So investors need to be very aware of funds coming up to their 10-year term.” Read the full article here.