The tide of institutional investors selling private equity interests on the secondary market shows no sign of ebbing.
Public pension funds are still big sellers, with most of the sellers this year based in North America. And an increasing number of investors are starting to sell interests in older funds, those they have had in their portfolios for 14 or 15 years.
Investors including the California Public Employees' Retirement System, Ontario Municipal Employees Retirement System and New York City Retirement Systems have sold private equity fund interests on the secondary market so far this year, and more sales are expected.
In the first half of 2012, $13 billion in private equity interests were sold on the secondary market worldwide, much of it by institutional investors, according to a recent report by Cogent Partners, Dallas. This is up from $11 billion in the second half of 2011.
Pension funds are the second most active sellers on the secondary market, with 20% of the transactions and 31% of the transaction value in the first half of the year, according to Cogent. Financial institutions are the biggest sellers, accounted for 34% of sellers by number and 33% by transaction value in the period.
In mid-July, CalPERS Chief Investment Officer Joe Dear said the $235 billion Sacramento-based fund had sold $1.5 billion of private equity interests on the secondary market, ending 23 private equity relationships.
Also in July, the Toronto-based C$55 billion (US$54.9 billion) OMERS sold to AXA Private Equity a portfolio of 11 private equity buyout funds with a total of about US$850 million in original commitments.