Published Works | Investment & Pensions Europe | 28 August 2020
COVID-19 and fund secondaries – how should pension schemes position themselves?
Partners Ed Harris, Jeremy Pickles, Faye Jarvis and Adam Brown co-wrote an Investment & Pensions Europe article which focusses on how pension funds can best position themselves to take advantage of the secondaries market.
After the last global finance crisis there was a wave of investors in private equity funds selling down their positions in portfolio secondary sales. This was driven by a combination of the denominator effect and the adverse consequences of an over-commitment strategy left them unable to satisfy capital calls and craving liquidity. In this article, we cover:
- how pension funds can best position themselves to take advantage of the secondaries market re-opening.
- look at some of the lessons from the last global financial crisis for pension funds selling out when valuations maybe at their lowest and/or discounts may be at their steepest.
- how the burgeoning availability of preferred equity can allow pension funds to balance economically their portfolio whilst retaining some of the upside.
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