In the 12 months preceding this March, limited partners reduced their commitments to PE

 

In the 12 months preceding this March, limited partners reduced their commitments to PE, VC, real estate, private debt, and funds-of-funds by 15% to 64%.  VC fundraising saw a 38.4% decline. The high interest rates and volatile macroeconomic conditions have severely impacted returns on private investment, causing LPs to curb their investments in the asset class. However, investors are now raising Secondary funds to buy out stakes of other LPs.  As a result, secondary funds raised 39% more capital over the 12-month period ending March.  Blackstone closed two secondary funds worth $25B in January.  The move is helping investment firms scoop up stakes in promising startups in the secondary markets at huge discounts.  The move is beneficial for investors that are short on cash and are looking to liquidate their stakes in portfolio startups in order to generate liquidity.