When it comes to the private equity secondary market, salability might be all in the family.
Toronto-based secondary market brokerage firm Setter Capital Inc. ranked the 35 private equity fund families that have at least one fund that is highly sought after on the secondary market. Setter provides the fund families with a liquidity rating — “excellent,” “very good,” “good” and unrated — reflecting how easily limited partnership interests in funds in that family are expected to sell on the secondary market. The ratings are based on 1,300 buyers' shortlists of desired funds. Setter does not have fund-level salability rankings.
Blackstone Group's Blackstone Capital Partners tops Setter's list of the 35 most desirable fund families. Setter gives Blackstone Capital Partners an “excellent” rating, in part based on the fact that there are 92 buyers interested in buying limited partnership interests in at least one of the 10 funds in the family. Apollo Global Management's 11-fund flagship leveraged buyout fund family, Apollo Investment Funds LP is next on the list, with an “excellent” rating and 80 buyers. Third on the list is Bain Capital's flagship buyout fund family, with an “excellent” rating and 78 potential buyers.
Rated managers are in great demand and have “a knowledgeable buyer universe,” said Kristina Kulikova, a Setter analyst. “If there are restrictions to sell, this will often impact the salability and the manager may be ranked lower.”