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All secondaries opportunities are not created equal, and we try to focus on the transactions that are being done for the right reasons. Due diligence has significantly increased over the last few years. The way the underwrite is done is now more akin to fresh capital investments – investors rely less on the GPs and conduct a lot more external due diligence, with asset quality and durability of cashflows remaining the key items of focus.

Alignment with managers, combined with the ability to invest at the right price and at the right time, has always guided our selection process. This approach is even more relevant in today’s rapidly evolving macroeconomic environment, characterised by shifting industry dynamics and accelerating innovation cycles. In this context, discipline and rigorous diligence have never been more critical.

Quality of the asset and sustainability of performance are much more prominent today in the investment rationale than simply the discounts that secondaries deals can offer. Talking about rationale, there is also a lot of focus on why a secondaries transaction was selected, why the GP is willing to retain exposure, and how replicable the performance achieved is. Investors also expect even more clarity around the exit route in these secondaries processes.

Finally, investors need to buy into the valuation and scrutinize it against comparables, trends and potential exit scenarios. On single-asset deals, investors look for GPs that know the assets well and have delivered on similar playbooks in the past. On multi-asset deals, concentration across the portfolio is also very important and sometimes overlooked. Backing a portfolio of assets across different sectors, geographies, etc., requires an understanding of what risk assumptions are made and what cross-asset correlation looks like.