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Bump, I am also considering a career in secondaries
Depends on the type of deal:
LP stakes will be more aligned with portfolio management, especially at a large fund purchasing many positions
GP stakes/ fund restructuring will be closer to PE with deeper insight into individual assets
I've seen good exits/ business school transitions, especially from more recognizable names (Blackstone SP, GS, Ardian), so I wouldn't worry too much about that.
Just out of personal curiosity, what are the most well known secondary funds and what is the motivation to work here versus traditional buyout funds?
Furthermore, how does recruiting for this work and what are the skills/knowledge you need to recruit for secondaries?
A guy in my class went to a secondaries fund and from what i can tell:
Better hours
Less operational involvement in portco's (close to none in most cases, since you're an LP)
Less hardcore DD (portfolio investing vs single asset investing - even if you spend the same amount of hours on DD, you have more portcos to spread that over)
More restructuring type work
What are his exit opportunities? Seems like a dead end.
Secondaries IS the exit opportunity. Why exactly would you want to leave a job where you're a 1%er for working 50ish hours a week?
Not every job is a stepping stone to something else (in fact, most aren't).
Cause FoF is a dying breed? There was a study by Preqin that proves it. Sooner or later I am pretty sure these secondaries folks have to jump ship. Thats the reason for asking. Looks like they may have to start off in some entry level stuff after that. The skillset just isn't transferable.
There is a distinction between FoFs and secondaries. I agree fund of funds are not a very compelling investment and that the skill set isn't the most transferable if your end goal is traditional PE. However the secondaries market is growing as LP's seek liquidity among other reasons. Last year was the second straight year of record volume, the market grew 28% to $74B in transactions - secondaries also have a higher return profile.
FoF are dying, Secondaries are not. In fact every year sets another record for transaction volume, and funds are raising increasingly larger funds.
To answer another question, Secondaries is the Exit Opp.
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