Coller Capital principal Giovanni Orsi talks to unquote" editor-in-chief Kimberly Romaine about the growth of the secondaries market.
Secondaries activity has increased exponentially over the past few years. And, according to Orsi, this trend shows no signs of dying down: "We expect the market to grow in the next 2-3 years. Based on some of our recent research, we anticipate that more than 60% of LPs will be active on the secondaries market either as buyers or sellers – a figure higher than it was in the past."
In addition to strategic sellers such as banks and insurance companies, Orsi highlights the sustained emergence of more "tactical" players using secondaries as an asset management tool. He also notes that hedge funds are also expected to play a larger part in the secondaries market: "There are side pockets of private equity-type assets in hedge funds that are not managed properly today."
Finally, Orsi touches upon the current crop of staple secondaries: "This is something that is more driven by the economic situation, and which makes sense now in a difficult fundraising environment. But I don't think this is is a trend that will grow, and I don't think it will particularly benefit the industry."
This is an excerpt from the full conversation, recorded at the annual unquote" Italian Private Equity Congress in November. Click the player above to watch the video in full.
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