Blackstone has retained its crown as the most sought-after US private equity manager on the secondaries market, new research from Setter Capital has revealed.
The firm pipped Bain Capital’s buyout funds to the top spot in Setter’s latest report, which covers large US LBO firms in the third quarter of the year.
Advent International also scored highly by rising to third place in the rankings, with Apollo dropping down from second spot to replace it.
New Mountain Capital was listed as the most sought-after firm currently fundraising, although earlier this week the firm completed its hefty fifth fundraise by striking a $6.15bn final close.
Silver Lake Partners broke into the top ten in the latest Setter report, the youngest private equity firm to do so alongside New Mountain, with both having raised their debut funds in 2000.
The firm recently collected $15bn to complete the biggest-ever tech-focused private equity fundraise, smashing its initial $12.5bn target
Insight Venture Partners was a new addition to the list in 34th positions, while Friedman Fleischer & Lowe dropped out of the top 35 compared to this time last year.
Setter publishes its “most sought-after managers” rankings on a quarterly and semi-annual basis, in an attempt to capture the ebb and flow of secondary demand across various fund strategies and geographies.
The rankings are largely based on the Setter Liquidity Rating, which assigns funds a rating of excellent, very good, good or unrated depending on the number of secondary buyers that want to buy and/or have recently priced a given fund.
Setter said there were significantly more prime buyers – existing investors in the fund family, those who have it on their shortlist or have recently priced it – for the “most sought after” managers that for those it has classed as unrated.
It said the average price of Top 35 firms was 94.94 per cent of NAV, compared to 77.81 per cent for unrated firms.
Unsurprisingly, the Top 35 managers had a significantly higher performance than unrated firms, at 16.62 per cent IRR on average compared to 5.55 per cent.
“Most sought after” firms had also had much larger average fund sizes than unrated ones, at about $3.2bn compared to $1.8bn.
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