Triago, a Paris-based private equity adviser, has formed a separate arm to help institutions sell their assets in this sector.
The group, Triago-X, is aiming to sell between $500m and $1bn of private equity assets second-hand each year. The private equity market has been maturing and annual turnover of second-hand investments is about 1% of the global total holdings of about $750bn, according to Antoine Dréan, chairman and chief executive of Triago.
Triago earns from the private equity vendor a commission of between 1% and 10% on the value of the portfolio being sold. Triago helped its first institution sell a portfolio of private equity assets in 1993 and the new arm will pull together six people in New York and Paris. Dréan said he would be hiring another six over the next year.
Triago-X now offers a members-only website to provide advice and initial estimates on the value of an institution’s private equity portfolio.
Dréan said an increasing number of institutions are selling part or all of their private equity portfolio. The most common reason is a change in investment strategy as the risks or returns failed to match expectations but there are also investors rotating between different private equity firms or regions in search of the best returns.
Coller Capital, a UK-based specialist in second-hand private equity sales, in its twice-yearly review of 105 investors’ expectations last week said buy-out funds were likely to receive the most interest in the future ahead of venture capital. About 90% of investors said there were satisfied or very pleased with the historical returns from buy-out funds, compared to 60% saying the same thing about venture capital funds.
Triago’s main business is helping private equity firms find investors for their funds.