Survey: What do you think of the private placement secondary market?

Wed May 30, 2012

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Hedge fund and private equity secondaries could exceed $100B in 2012, but some investors still only think of it as an emergency exit. What are your views?


PortfolioCentriX, a provider of software to institutional investors, is conducting a survey to determine investor and manager views of the private placement secondaries market, and of the many so-called "liquid alpha" replication strategies that are supposed to avoid the problem of alternatives illiquidity altogether by offering investors hedge fund-sized returns with public market liquidity.

In 2011, there were $75 billion of secondary transactions in private placements purchased with levered and unlevered investor capital, up from $46 billion in 2010, according to PortfolioCentriX. "Investors, who in the past would not sell at a discount, are now selling stakes at substantial reductions, often due to the long lock-up periods of the funds," said chief executive Brian Shapiro. "But the secondary market is no longer just an emergency exit." The market for private placement secondaries is on track to exceed $100 billion, with investors using it as non-urgent source of liquidity, he predicts, yet it remains fragmented, opaque and confusing to investors.

The Alternative Asset Secondary Market & Liquidity Survey seeks to identify beliefs contained within the marketplace regarding the use and acceptance of a fledgling secondary market and the sentiment toward longer-lock private placements.

To receive advanced notice of the results, which will be reported by AR, please take five minutes to complete the survey (or refer it to someone in your organization who can).

Click here to take the survey