Private Credit Secondaries Solutions

What are private credit secondaries?

Private credit secondaries - What are private credit secondaries?

Private credit has been one of the most dynamic areas of the alternative assets market over the last decade. What used to be a niche before the financial crisis, has grown rapidly and has reached a size of roughly $2 trillion¹ in turnover, to be one of the largest asset classes within private markets and it actually is forecast to be the fastest growing asset class in the segment.

In 2021, we launched our first dedicated ‘Coller Credit Secondaries – Opportunities Fund I’, the world’s largest fund dedicated to private credit secondaries of its time, however, credit investing has been part of our DNA since 2007 when we launched our CIP V fund in. Our core investment team have been investing together for over 16 years and today we have 12 investment professionals dedicated to credit.

¹ Source: IMF

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Michael Schad, Head of Credit Secondaries, talks about the evolution of the private credit secondaries market, and our expertise in private credit secondaries transactions.

View transcript

00:03 – 00:25

Private debt is one of the most exciting asset classes within alternatives. What used to be a niche, really, before the financial crisis has now grown to be one of the largest a...

sset classes within private markets and it actually is forecast to be the fastest growing asset class in the segment.

00.26 – 00:48

If you look at the market in its totality, it’s roughly $1.2 trillion in size when you just look at private credit funds. If you look at the asset class more holistically, we estimate the market will be close to $2.5 trillion. So really a very, very, sizable segment of the alternatives market.

00:49 – 01:19

The private credit secondary market has developed rapidly over the last years. It has reached a size of roughly $15 billion in turnover. So, it is now a fully functioning and substantial market.

Actually, the development of the market very much reminds me of when I joined Coller Capital in 2005 when private equity secondaries was actually of similar size to where private credit secondaries are today.

01:20 – 01:55

The industry really started after the global financial crisis and built up over the last five to six years and has now reached sufficient size to sustain a very attractive secondary market as investors start to look for liquidity options when the funds that they have invested in are fully drawn and have reached maturity.

The largest part of the private credit secondary market is driven by portfolio sale of LP positions or sale of single LP positions.

01:56 – 02:52

To be successful in this market you really have to understand the underlying loans that sit in these funds, and you have to understand how the manager the GP is looking after them.

Having superior data analysis and analytical capability is really key to be successful in this market.

Coller Capital is the pioneer in the private credit secondaries market. We started investing in the asset class just after the financial crisis, and we’ve deployed significant amounts of capital ever since. To reflect the rapid growth in private credit, we raised the largest pool of dedicated capital targeted at private credit in 2022, with our Coller Credit Opportunity strategy.

02:53 – 03:51

At Coller Capital we cover all types of transactions that are available in the private credit secondary market ranging from the purchase of LP portfolios to GP-led and continuation vehicles and also complex solutions that we provide to sellers. A good example of this is the largest secondary transaction that was done to date. A transaction that we’ve done together with Ping An insurance to provide a liquidity solution for parts of their private credit portfolio.

Today we have the largest team in private credit secondaries focused on this opportunity. And what I believe is unique about Coller Capital in the space is that our team combines stringent credit underwriting skills with a long-standing experience in the secondary market.

Private credit secondaries to see significant expansion in the next three years

In the 40th edition of our Global Private Capital Barometer, published Summer 2024, we found that 63% of respondents expected private credit to see significant expansion in the secondary market in the next three years.

Uncover further findings in the full report.

Data correct per 40th edn. Summer Barometer Report 2024

View the report

Private credit secondary funds

A well-resourced platform to capture opportunities across a wide range of credit strategies

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Selected private credit investments

Ping An

In July 2021, Coller Capital’s investment and co-investment vehicles led the world’s largest private credit secondaries transaction for a $680 million credit portfolio managed by Ping An Overseas Holdings.

Cathay Life

In December 2022, CCO I agreed to acquire a $40 million position in a 2017 vintage fund with a focus on US and European mezzanine investments from Cathay Life Insurance.

Key contacts

Michael Schad

Partner, Head of Coller Credit Secondaries

Ed Goldstein

Partner, CIO of Coller Credit Secondaries

Martins Marnauza

Partner, Investment

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