After a record $79.7 billion in 2018, secondary market transaction volume hit $46 billion during the first half 2019, representing a 25.4 percent increase from the volume recorded in the Setter Capital Volume Report H1 2018.
Volume was mixed across alternative asset classes. The private equity secondary market (funds and directs) increased 33.5 percent year over year, to a total of $42.1 billion. Real estate secondaries (funds and directs) were down 39.2 percent to $1.9 billion, as were hedge fund secondaries, which were down 35.1 percent to $340 million. Private equity fund secondaries were up 33.1 percent ($25.51 billion in first half 2019 from $19.16 billion in first half 2018), driven by the strong market for both LBO funds (up 24.5 percent) and purchases of VC funds (up 51.5 percent). Private debt secondaries were significantly up 279.3 percent ($2.2 billion in first half 2019 from $580 million in first half 2018), and energy fund secondaries were up 27.8 percent ($1.04 billion in first half 2019 from $810 million in first half 2018).
Traditional fund secondaries were up 23.9 percent from $23.06 billion in first half
2018 to $28.58 billion in first half 2019, while direct secondaries were up 27.8 percent from $13.64 billion to $17.43 billion (private equity directs were $16.59 billion and real estate directs were $840 million). Indeed, 57.1 percent of the survey respondents felt that meaningfully more GPs coordinated tender offers to their LPs or attempted to liquidate or restructure older funds in first half 2019 as compared to first half 2018, and 28.9 percent of respondents felt that a materially higher number of GPs sought staples in first half 2019 as compared to first half 2018.
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