The expansion of the secondary market has occurred alongside increased fundraising velocity and greater aggregate capital raises by fund managers. For example, McKinsey & Company reported that private fund managers raised $850 billion in 2020, while Forbes found that the global secondaries market exceeded $71 billion that same year. The continued growth of the secondary market evidences a shift away from the initial stigma associated with secondaries. Both sponsors and investors have recognized that the secondary market may facilitate an expanding set of solutions for market participants, including through negotiated continuation funds (CFs). Although the efficiency and functionality of the market will continue to depend on trust and careful process management, it also stands to benefit from a range of good governance norms that can help transactions close efficiently and deliver favorable outcomes. In a guest article, Skadden Arps partners John M. Caccia, Greg Norman and Anna Rips review the different roles that may be played by transparency, reporting, governance and trust at different phases of the CF process, as well as the distinct parts those sponsor-investor relationship drivers may play during the design and launch phases of CFs. See “Latest on Key Terms, Structuring Approaches and Trends in Secondary Transactions and Co‑Investments (Part One of Two)
” (Jan. 11, 2022).