With companies staying private longer, the secondaries market continued to see record-breaking activity in 2021. According to Jefferies, these continuation funds accounted for 84% of GP-led transactions while Pitchbook reported secondary deals broke a record with $132 billion in volume last year. It was the second year in a row that GP-led volume outpaced traditional LP transactions.
Rolling portfolio assets into a continuation fund is no longer considered a sign of distress. In fact, it's often an indication of success as GPs strategically use 'secondaries' to extract continuing value from their best performing investments.
Institutional demand for secondaries also closely correlates to the growth in both mega-rounds and privately-held unicorns. Mega deals grew a staggering 156% last year while the number of unicorns has increased five-fold in just six years according to Pitchbook.
To learn more about the trends in both the secondaries and private equities markets please visit us at www.GabrielHornCapital.com.