Weekly round-up: spotlight on secondaries

unquote" explored the rise of direct secondaries, which have experienced a tenfold increase since 2002. At fund level, the industry is thriving with $25bn's worth of secondaries recorded last year, though, on a deal-by-deal basis, LPs are less willing to commit. But with the number of zombie funds growing at an alarming rate, perhaps LPs need to reassess when to cut their losses. "LPs need to form a view on whether they want their money to stay stuck in old deals simply because change is too hard, or if the LP community as a whole wants to do something about this legacy asset build-up," warns Julian Mash, CEO at Vision Capital, a direct secondaries player set up in 1997. "It's easy to do nothing. It's easy to say 'It's too difficult to change'. But that's sub-optimal."

Over in the venture space, Cipio Partners managing director Roland Dennert spoke to unquote" about the growing role of venture direct secondaries as an alternative exit route to trade sales and IPOs. As average holding periods extend across Europe, delayed exits see venture capitalists face an added challenge in an already tough fundraising market. Says Dennert: "The mounting pressure felt by private equity firms to divest portfolio companies can then lead to GPs pushing firms into premature trade sales – not because the firm is ready to do so, but because they need an exit on their track record." 

After 18 months of choppy waters, the private equity industry in Central and Eastern Europe (CEE) has enjoyed a wave of good news in the last quarter. unquote" shone a light on recent dealflow in the region, as well as the potential impact of the renationalisation of the Polish state pension fund on the local market.

That's all from me this week but if you have any comments on this week's analysis, please send your thoughts to amy.king@incisivemedia.com

You can continue to follow me and the rest of the unquote" team via @unquotenews for all the latest private equity and venture capital updates and of course on unquote.com.

Amy King
Senior Reporter, unquote"

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