The joint venture will combine Emerge9’s origination and custom fund solutions with ACP’s global relationships and presence across the Middle East, LatAm and Asia.

GP-led secondary deals represent a growing segment of the PE secondary market, with transaction volume growing from $7bn in 2015 to $51bn in 2023, according to Evercore . Given constrained M&A and IPO markets, a growing number of GP’s are providing liquidity to their respective LP’s by transferring prized assets into so-called continuation vehicles, funded by a new set of investors. In these transactions, where GP’s normally roll most (if not all) of their carried interest into the continuation vehicle, investors benefit from a strong alignment of interests and visibility into a given asset’s past performance under the GP’s stewardship.

“The combination of high-quality transactions and a supply/demand imbalance favoring investors makes the GP-led market particularly attractive. This joint venture complements our expertise and strategy to explore the market opportunity in PE secondaries. At the same time, our partnership with Emerge9 allows us to execute this strategy in a much more timely, efficient manner,” stated Daniel Chapman, ACP’s CEO and Founder.

Despite a broad set of high-quality transactions coming to market over the past 5 years, the GP-led market remains undercapitalized. As PJT Partners recently noted in its January 2024 Investor Roadmap, the PE secondary market is buyside constrained with a capital overhang ratio at record lows, reflected by a capital overhang ratio (deal volume vs dry powder) of 1.3x expected for 2024 versus 2.0x in 2022 . Amid a capital constrained environment, PJT predicts continued returns of >2.5x net MOIC .

As part of the joint venture, both firms will collaborate on a set of initiatives aimed at broadening non-institutional investor access to private equity. “As Emerge9 seeks to democratize private equity through innovative technology tools, including our new AI Assistant, we believe that this joint venture positions us to accelerate our growth, particularly as we develop our distribution network in the Middle East, Europe and Latin America,” said John Abbott, CEO and co-founder of Emerge9.