Spotlight: A PEI Podcast PEI Group

Single-asset continuation funds have surged in popularity in recent years. While the technology isn't new, it took persistence from secondaries market advisers to show both private equity managers and buyers that vehicles associated with the moniker 'zombie funds' could be used to keep hold of star-performing assets.
Last year, single-asset continuation fund vehicles took out the largest share of GP-led transactions, accounting for around 39 percent of the $48 billion of volume seen in this part of the market, according to a year-end report from Lazard.
There was "some reluctance" from secondaries buyers when conversations around single-asset continuation fund transactions began, Harold Hope, global head of secondaries at Goldman Sachs Asset Management, told Secondaries Investor. "We traditionally bought portfolios. Sometimes they were concentrated portfolios, but they were always portfolios."
Today, these vehicles allow Goldman Sachs "to mitigate some of the broader risk that we face when we buy a diversified portfolio," Hope said, adding that the team is "excited about the opportunities" globally.
In this third episode of the Decade of Secondaries Investing podcast miniseries to celebrate the 10 years since Secondaries Investor launched, we sit down with Hope and Holcombe Green, global head of Lazard’s private capital advisory business. They discuss how continuation fund technology was developed over time to facilitate single-asset continuation funds, and how large this pocket of the market could become as more capital is allocated to the area.
For full coverage of our Decade of Secondaries Investing series, including all podcast episodes and an interactive timeline, click here.

What's in a name? The process of moving an asset or assets from an existing private markets fund into a separate structure has been happening for some time now – some say as early as 2006 and possibly even prior to that.
The so-called 'continuation fund' market was worth around $40 billion last year, according to advisory estimates. Yet, this market was not always seen as a positive and constructive tool with which fund sponsors could deliver liquidity, via an option, while retaining their hold over prized assets.
In the second episode of the Decade of Secondaries Investing miniseries to celebrate the 10 years since Secondaries Investor launched, we sit down with Nigel Dawn, head of private capital advisory at investment bank Evercore, and Verdun Perry, global head of Blackstone's Strategic Partners group, to discuss the evolution of the continuation fund market over the past decade and what's in store for how this tool will continue to be used.
For full coverage of our Decade of Secondaries Investing series, including all podcast episodes and an interactive timeline, click here.
See the PEI 300 here.
Read "Single-asset CVs offer steadier returns than buyout funds – Evercore
Read "How do continuation funds really perform?"
Read "More LPs seek to back secondaries funds"

This episode is sponsored by Blackstone
Private credit has seen significant growth over the past year, with some of the largest asset managers increasing their allocations to the sector. It comes as volatile market conditions and geopolitical tensions have plagued most industries, revealing private debt as a more secure source of capital. So, how are firms looking to take advantage of this uptick in activity? And what areas will they be focusing on going forward?
In this episode, we're joined by Blackstone’s Michael Zawadzki and Brad Marshall to explore some of the trends shaping private credit and analyse what the manager’s investment strategy looks like. The podcast comes after Blackstone integrated its corporate credit, asset-based finance, and insurance groups into a single new unit called Blackstone Credit & Insurance (BXCI) in September.

On this episode, François Trausch, CEO and CIO of PIMCO Prime Real Estate, reflects on the behavior of the central banks, refinancing and the demands of decarbonization. Recorded at the PERE Europe conference as part of his keynote address, he speaks with PEI Group’s Jonathan Brasse about the outlook for the market.“I think learning to be a good investor is also learning to do nothing from time to time,” he said. “That doesn't mean [investors are] not busy… There's work to be done, and I think if the bid-ask spread is narrowing, which we're seeing, I think sales will come back and there's lots to be done in putting the same teams on the sales effort and understanding how to use the capital stack, not just you know, to do equity, but to look at more hybrid ways to invest.”Read more of PERE's coverage here

A decade ago, in the aftermath of the global financial crisis, anxiety around unknowns was still rippling through financial markets, including within secondaries. Similarly, there was a great deal of concern around the Volcker Rule that came into effect in 2014, which essentially prohibited banks from investing in private equity with their own funds.
In 2013, secondaries volume sat at around $28 billion. The following year, volume leapt to $42 billion. While regulation should not be overplayed, the Volcker Rule and Solvency II – a regulation affecting insurance companies and the percentage of risky assets they can hold on their balance sheets – played a big role in this increase.
In 2014, "There was suddenly... a lot more publicity being given to what people had been doing," Katherine Ashton, partner at Debevoise & Plimpton, explained. "With the increased publicity, with the increased knowledge of the market, that fed on itself and led to outdoing some of the predictions [for the growth of the market] because the more people realised that there were willing buyers and sellers, the more it allowed the market to develop."
Welcome to the Decade of Secondaries Investing miniseries, where we celebrate 10 years of Secondaries Investor with reflections on key trends that have shaped the market, as well as a glimpse into what likely lies ahead. In this first episode, we sit down with Ashton as well as Michael Granoff, chief executive and founder at Pomona Capital. Each give insight into how the Volcker Rule and other post-GFC legislative frameworks spurred secondaries sales.
For full coverage of our Decade of Secondaries Investing series, including all podcast episodes and an interactive timeline, click here.

In this episode, Brian Thies and Christopher Wolfe of Fitch Ratings speak with PERE Americas editor Miriam Hall about the outlook for multifamily real estate in the US and how banks may be exposed.
Banks’ multifamily lending has grown 32 percent since the end of 2019, per a Fitch report last month, to hit $613 billion at the end of 2023. That is a complicating factor for some regional banks, especially those with significant exposure to rent-controlled assets or areas facing oversupply. “The performance is still looking good, but that growth is probably masking what's underneath,” Wolfe said on the show.
Theis said it is an asset that has “flown under the radar” to a certain extent. “It's a class within CRE that has seen significant growth over the last four years – and as such, most of that was underwritten at extremely low interest rates,” he added. “So now, as a lot of that is coming up for refinance, it's doing so at significantly higher rates.”
PERE’s April cover examines outlook for multifamily, which you can read here.