Oregon Investment Council is planning on setting up a $100 million customized secondary program to be managed by PCG Asset Management. The council believes that the current financial crisis has created what could possibly be a short-lived opportunity to acquire attractively priced secondary LP interests in PE funds of between $5 million and $20 million. The program will target funds that the OIC already has interests in or which it and PCG know well.
While the wave of predicted secondary sales has yet to emerge, signs like Oregon's commitment and Stanford Management Co's sale show that activity may be picking up. Well over $10 billion has been committed to secondary funds recently between the 11 PE secondary funds currently fundraising and the 8 closed in the past two years, according to the PitchBook Platform. With the economy stabilizing and valuations no longer in free fall, secondary deal flow could begin to pick up as limited partners and buyers are able to value the underlying holdings better and close the bid/ask gap. Firms like Lexington Partners, Goldman Sachs Private Equity Group, HarbourVest Partners and Hamilton Lane are certainly ready with capital when/if deal flow does pick up.