Adams Street secures USD 3.2bn for newest secondaries programme amid LP stakes dealflow uptick

Global Secondary Fund 7 was launched in 2021 and had a USD 1.5bn target, according to Unquote Data. The amount raised by the fund has not been disclosed.

The new programme is 50% larger than its predecessor, the firm said in a press release. It announced in 2019 that it had raised more than USD 2bn for its secondaries strategy since April 2016,

Its sixth secondaries strategy included USD 1.2bn in commitments for its sixth Global Secondary Fund against a USD 1.05bn target. The vehicle was 70% deployed as of December 2021, according to Unquote Data.

The new fundraise has increased the total secondaries assets at Adams Street to USD 8.2bn, while the firm as USD 54bn assets under management (AUM) in total, according to the same press release. It manages a range of primary fund and co-investment strategies via funds and managed accounts.

Investors
The newest secondaries programme is backed by “some of the most respected institutions globally”, partner and head of secondary investments Jeff Akers told Unquote. For its seventh fund, the firm has also “made significant progress” in expanding its investor base in Asia, he said.

Investors backing the vehicle include the Minnesota State Board of Investment, which made a commitment of more than USD 84m, a slight decrease from the USD 100m that it committed to the sixth secondaries fund, according to Unquote Data.

Limited partners (LPs) in the firm’s sixth secondaries fund include UK-based and US-based public pension funds, including the county council funds of Nottinghamshire, Leicestershire and Cheshire, according to Unquote Data.

Investments
The strategy will continue to target global secondaries opportunities. Adams Street’s predecessor secondaries fund typically invested USD 5m-USD 500m per deal, according to Unquote Data.

“We anticipate a balance of GP-led and traditional LP stake transactions,” Akers said. “We are focused on acquiring high quality assets we know well at prices below our view of intrinsic value. Assuming we can meet our stringent risk management objectives around duration and concentration, we are fairly agnostic about the deal types we pursue to meet our return objectives.”

Although there is significant interest in continuation funds as an exit option for GPs in the current market, LPs’ liquidity needs are also driving sell-side LP stake opportunities. ”We have seen an increase in traditional LP stakes as a proportion of our deployment over the last 12 months,” Akers said. “Given market volatility, many institutional investors are highly motivated to produce liquidity or rebalance their portfolios. Proactively initiating traditional LP stake sales is an efficient mechanism for investors to meet their objectives.”

People
Adams Street Partners – Jeff Akers (partner and head of secondary investments).

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