The infrastructure secondaries market is experiencing rapid growth, providing mid-market general partners and limited partners with an increasing number of liquidity solutions.
Unlike other private market asset classes, infrastructure investments are often de-risked through their underlying cash-generative assets, making them inherently more stable. However, the sector’s long holding periods present challenges for investors seeking liquidity.
The market is also still relatively nascent. This creates inefficiencies, particularly in LP-led secondaries, that allow for significant arbitrage through double-digit discounted transactions.
In contrast, continuation vehicles are emerging as an attractive alternative. Pricing remains strong in continuation vehicles, with high-quality assets trading at an average of 90% of net asset value (NAV), making secondaries an efficient entry strategy into this growing market.
In 2024 alone, GP-led continuation vehicles accounted for approximately $12 billion in total transaction volume, reflecting a 60% year-on-year growth.
With primary infrastructure fundraising expected to reach nearly $30 billion by 2029, secondary market activity, particularly continuation vehicles, is set to rise as LPs rebalance their portfolios to accommodate new commitments.
Institutional investors are taking note, with Blackstone’s recent $4 billion infrastructure secondaries fund targeting continuation investments in core and core-plus assets.
This growth signals the increasing maturity of the sector and the role of secondaries in infrastructure portfolio management.
Quest Fund Placement: Adding Value to the Market
Quest Fund Placement is uniquely positioned to help mid-market GPs and LPs navigate the growing continuation opportunity.
For LPs, our expertise lies in syndicating smaller LPs into these transactions, a crucial advantage in a landscape historically dominated by large institutional buyers. Our extensive investor network, including endowments and family offices, allows access to secondary transactions that were previously challenging to enter due to ticket size constraints.
For GPs, our model provides an opportunity for managers to diversify their investor base beyond traditional secondaries players. This is particularly attractive if those investors have primary capacity.
With 22 years of experience and strong LP coverage in the US, Quest Fund Placement provides expert guidance, ensuring clients maximise liquidity opportunities in infrastructure secondaries.