A small group of infrastructure GPs have raised record amounts to target the secondary fund market. With LPs globally expected to face liquidity stress from COVID-19 pension withdrawals and an infra overallocation from the denominator effect, these GP buyers are waiting in the wings. Colin Leopold reports
It could be said that the seeds of the infrastructure fund secondary market were sown in the early months of 2009, just after the global financial crisis. Except it wasn’t infrastructure funds that were being bought and sold, it was private equity.
A number of private equity LPs had become distressed and were forced to sell. They included US endowments which in some cases had been using long-term returns to cover operational costs at their universities, says a US-based placement agent who remembers the period.