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1mo

There’s a corner of the #privatemarkets that has grown 10-fold since 2009—and chances are, you haven’t even heard of it. Verdun Perry, Global Head of Blackstone’s #secondaries business, unpacks how this market works, the factors powering its remarkable growth and why #Blackstone’s scale helps capture opportunities. 👀👇

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I think investors are excited about the fact that there are lots of buying opportunities for secondary buyers right now. The secondary market is a marketplace where buyers buy secondary LP interest in private equity funds. In short, what we're doing is providing liquidity to an otherwise long term illiquid asset class. I'll use an analogy. There are multiple ways you can buy a house. One way is to buy it off a blueprint. There's just land right now. You have a developer. They'll tell you exactly how this house is going to look. But at the end of the day, you don't know, and you won't know until that house is built. As a secondary buyer, we wait till the house is built. We will walk the neighborhood, tour the home. And then we'll try and buy that house at roughly $0.80 on the dollar of what everyone else paid for their home in that same neighborhood. That's what a secondary is. When I think about the current state of the secondary market, I'm very optimistic. The growth in the secondary market is driven by the growth in the primary market. The primary market has grown significantly over the last 20 years, the number of primary dollars committed to private equity funds since 2009 has increased fourfold. And so as that primary market grows, we expect many of those sellers to ultimately see their way to the secondary market. When I started, the overall secondary market was 1.4 billion in size. This year, we expect it to be 140 billion in size, a 100 fold increase. Scale gives us the ability to do the largest transactions. And at that end of the market, the competitive field is much narrower. Today, we're invested in over 5500 unique funds managed by over 1700 different GPs. We believe we have more relationships than anyone in the market and frankly, gives us a huge advantage as a counterparty, as a buyer. This is a very specialized skill set. You need lots of information and people that have the judgment to apply that data to real life examples When you think about a private equity fund, in short, it's a long term, illiquid asset class. Should someone have the need to or want to get out? There has to be a market today only 1% of the roughly 13 trillion in value in private market funds trades on the secondary market. We believe there's room to grow. We can move in scale in terms of number of funds

CEO | CIO

1mo

One of the GOAT 🐐

Izel Nakri 🇺🇦

self-tenured

1mo

Once those securities tokenize on blockchains, smart investors can buy those at 40-60 cents on the dollar instead of 80, so that needs to happen.

Bcom, MMM

1mo

If interest rates go up the bank will have challenge to resolve

President of Sierra Pacific Financial Advisors | Retirement Planning Advisor for Professionals Working in IT Industry | Specialist on Exercising Strategy for Stock Options, RSUs, ESPPs | Educator for Women in Finance

1mo

Great summary of PE secondaries and wonderful analogy to residential real estate (think "fixer-upper" or having the resources to buy in a down market). Blackstone is creating exciting unique opportunities for our clients! 👏 👍

Strategic Sales Partnership & Business Development Manager | IOCL & G9 | CMI 7, CFA 7, MBA RQF 7

1mo

e.g: S.M. = £150,000 (average initial price) 0.80 = £120,000 gains. plz, correct me if I get it wrong.

1mo

I remember you at that point in 2009 sitting on a PE panel together. Nice explanation in layman’s terms. Congrats!

Healthcare Executive | Growth & Innovation | Payers & Health Services

1mo

Well said! Relationships and scale create the best position for growth.

Abhishek Vanenooru

Abhishek Vanenooru

Student at Rymec

1mo

speak loudly we cant hear you

Client Relationship Manager - Stifel

1mo

Verdun Perry great explaination.

Preston Lewellen

Preston Lewellen

Senior Director at Alvarez & Marsal

1mo

Great insights from Verdun Perry on how the secondaries market works plus how he has led the growth in the market to be an attractive, strong asset class for investors

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