Goldman Sachs Asset Management has closed its latest private market secondaries fund Vintage IX at $14.2 billion, as a challenging exit landscape pushes more and more managers to tap alternative liquidity sources.
The New York-headquartered firm also raised an additional $1 billion for its Vintage Infrastructure Partners vehicle, which targets opportunities in infrastructure secondaries.
Vintage IX and Vintage Infrastructure Partners are part of the firm’s Vintage Funds programme founded in 1998 which currently manages assets of over $45 billion as of June 30.
Vintage IX, the asset manager’s largest offering, is backed by institutional investors, high net-worth individuals, as well as Goldman Sachs employees. Its final close was nearly 38% higher than the $10.3-billion commitments garnered by its predecessor fund, Vintage VIII, in 2020, according to a release.
“In addition to this capital, we also raised committed co-investment capital, which gives us the flexibility to pursue a diverse opportunity set, including the largest deals in today’s market,” said Harold Hope, Global Head of Secondaries at Goldman Sachs Asset Management. However, the firm did not disclose the sum of the co-investment capital.
The first half of 2023 saw 22 secondary funds raise a combined $34.9 billion, which was 64% of the total fundraising proceeds in 2022. However, the growth was mainly driven by the closing of two Blackstone funds that raised a record $24.9 billion in Q1, which contributed to 71.3% of the total financing, according to data from research firm PitchBook.
“The median time to close for secondary funds so far in 2023 is 19.1 months, compared to 13.5 months in 2022. Given that the number of secondary funds raised each year is relatively small, a drop in Q2 is likely due to a lack of large funds in the quarter boosting results rather than the start of a trend,” PitchBook’s analysts commented in a Q2 report.
As venture capital and private equity exit routes narrow down amid macro uncertainties, allocators have turned to secondaries as an alternative source of liquidity. While secondaries have been historically led mainly by LPs, there has been a rise in GP-led secondary opportunities, which accounted for 48% of global secondary activity in 2022, per PitchBook data.
APAC fund managers too have been attempting to tap this opportunity, but pricing gaps, valuation uncertainties, alignment issues, and capital scarcity are some of the key roadblocks in the widespread adoption of GP-led secondaries in Asia, said panellists at DealStreetAsia’s Asia PE-VC Summit 2023.