Here’s a sign of the times: there’s a growing secondary market in private equity commitments.
For years, there was a tiny secondary market to make good on commitments to private equity funds that couldn’t be made good for idiosyncratic reasons. But now that asset value have been hit across the board, many investors are having trouble coming up with the funds to meet the money they promised to private equity funds. Others are under increasing pressure to reduce their exposure to “alternative investments.” So a private market to make up for shortfalls in commitments has grown up inside of a few investment banks.
Two of the big players in this market are Goldman Sachs and Credit Suisse, according to people familiar with the matter. They have been helping some clients exit commitments while getting other clients with a broader appetite for private equity increase their exposure. At both banks, we’re told, this has become a major business within the past couple of months.
We’d like to know more about this, of course. Send me an email to [email protected] if you know anything about this.