Completed transactions on the alternative investment secondary markets plummeted in the first half of 2020, down 56.1% from transaction volume in the first half of 2019, the latest Setter Capital Volume Report shows.
Private equity transaction volume fell 58.5% to $17.5 billion; infrastructure funds fell 4.7% to $1.4 billion; real estate secondary transactions fell by 53.4% to $890 million; private debt fund secondaries dropped 81.8% to $380 million; and hedge funds dropped by 55.1% to $150 million in the six months ended June 30 compared with the same period in 2019.
Only one category saw an increase in the first half of 2020 — agriculture and timber fund volume increased 69.5% to $270 million.
A total of 543 transactions were completed in the first half of 2020, down 39.3% from the year-earlier period. The average transaction size was about $37.2 million, a 27.7% decrease. Setter's report said the drop in average deal size was driven largely by the drop in large-scale deals being completed during the six months ended June 30.
In the second half of 2020, most buyers expect pension funds to be the biggest sellers, accounting for 34.5% of transaction volume.
In the first half of 2020, leveraged buyout, venture capital, hedge funds, fund-of-fund and secondary fund managers sold the most on the alternative investment secondary market, accounting for 35% of all sellers, the report showed.
Pension plans were the next most active sellers with 33% of the volume in the six months ended June 30.
The data are derived from a survey of 119 alternative investment secondary market buyers.
