Welcome back to the Alt Goes Mainstream podcast.
Today’s episode dives into the rapidly expanding world of secondaries with a senior leader at one of the pioneering firms in the secondaries space.
We sat down at Franklin Templeton’s New York office with Taylor Robinson, a Partner on the Secondary team at Lexington Partners, which has over $77B in total capitalization and is part of Franklin Templeton’s family of private markets funds and strategies.
Taylor, who joined the firm in 2008, is primarily focused on the origination, evaluation, and execution of secondary opportunities, including partnership and GP-led transactions. He’s also a member of Lexington’s ESG Steering Committee.
Taylor and I had a fascinating conversation about the current state of the secondaries market. We covered many of the hot button topics and trends that are shaping the secondaries market, including:
* Why secondaries have become an integral part of many LPs portfolios.
* How secondaries have become a portfolio management tool for LPs.
* The rise of GP-led secondaries.
* Why not all CVs are created equal.
* Why secondaries can be a good on-ramp to private markets for wealth channel investors.
* What the future holds for secondaries.
Thanks Taylor for coming on the show to share your expertise and wisdom about private markets and secondaries.
Thanks for reading Alt Goes Mainstream! Subscribe for free to receive new posts and support my work - writing and podcasting about the convergence of private markets and private wealth since December 2020.
Show Notes
00:00 A Different Way of Thinking About Private Equity
01:21 Welcome to the Alt Goes Mainstream Podcast
01:31 Meet Taylor Robinson from Lexington Partners
02:03 The Evolution of the Secondaries Market
02:36 Taylor Robinson’s Career Journey
03:16 Joining Lexington Partners During the Financial Crisis
04:49 The Growth of the Secondaries Market
05:46 Impact of the Financial Crisis on Secondaries
06:11 The Role of Liquidity in Market Growth
06:59 Current State of the Secondaries Market
07:39 Focus Areas in the Secondary Market
07:55 Traditional vs. GP-Led Secondary Deals
09:06 The Importance of Liquidity
10:26 Challenges for Institutional LPs
11:39 Active Portfolio Management
15:48 Evaluating and Partnering with GPs
16:50 The Role of Information and Relationships
20:53 Future of Secondary Markets and Regulation
23:58 Primary vs. Secondary Fund Investing
28:01 Nuances in Secondary Market Strategies
32:29 Asset Selection in Secondary Markets
32:50 Value Drivers in Secondary Deals
33:32 Consistent Return Generation
34:44 Specialization in Secondary Markets
35:12 Different Ways to Make Returns
36:35 Comparing Secondary and Primary Funds
38:38 Evaluating Secondary Funds
40:20 Evergreen Funds and Secondary Investments
44:07 Challenges in Evergreen Space
45:01 Investor Preferences and Structures
45:26 Wealth Channel and Capital Raising
46:50 Skillset for Secondary Investors
49:11 Importance of Intellectual Curiosity
50:17 Underrated Skills for Success
52:03 Industry Trends and GP Consolidation
53:36 Understanding Market Dynamics
54:58 Training and Retention at Lexington
55:25 Future of Secondary Markets
56:07 Scale and Growth Potential
57:56 Misconceptions About Secondary Markets
59:44 Shifting Mindsets on Secondary Investments
01:01:10 Evolution of the Secondary Market
01:01:39 Conclusion and Final Thoughts
Editing and post-production work for this episode was provided by The Podcast Consultant.
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