Welcome back to The Private Equity Podcast, by Raw Selection. In this week's episode, Alex Rawlings speaks with Cari Lodge, a seasoned investor with 25 years in private equity secondaries. They explore the market’s rapid growth from $2 billion to $160 billion, the increasing need for liquidity, and how secondaries optimize portfolio management. Cari discusses GP-led secondaries, continuation funds, and the market’s evolution, offering key insights into future opportunities in this space.

Breakdown:

[00:00] Introduction to the episode and guest, Cari Lodge, Managing Director and Head of Secondaries at CF Private Equity.

[00:28] Cari’s background, her start in secondaries, and how the market has expanded from $2 billion to $160 billion.

[01:45] Common mistake in private equity: Holding assets too long. How increasing holding periods from 5.7 years to 6.7 years impacts returns.

[03:34] Why firms miss exit opportunities. The importance of DPI and how delaying exits can lead to the same returns years later.

[04:29] Explanation of secondaries for newcomers. The role of LP secondaries, GP-led solutions, and the growing demand for liquidity.

[06:53] The benefits of secondaries for investors, including diversification, shorter duration, and strong IRRs and ROIs.

[08:49] Demand for GP-led secondaries, continuation funds, and LP transactions. How secondaries are now part of active portfolio management.

[10:42] The future of secondaries. Market expected to grow from $160 billion to $200–220 billion in 2024, but constrained by capital and human resources.

[12:33] Challenges holding the market back. Capital constraints, lack of resources, and evolving perceptions of secondaries.

[14:21] Why Cari loves the secondaries market. Exposure to 1,200+ private equity funds, constant evolution, and a collaborative industry.

[17:12] Key trends in private equity. The impact of higher interest rates, valuations, and the growing focus on liquidity solutions.

[20:32] Secondaries' role in providing liquidity. Now contributing 15–20% of total private equity liquidity.

[22:28] How secondaries adapt to market cycles. Benefits in both up and down markets, shifting from a distress play to a mainstream strategy.

[23:22] Cari’s recommended reads: The Economist, Private Equity Analyst, and What It Takes by Steve Schwarzman.

[25:14] How to reach Cari Lodge. Best contact method: LinkedIn.

[25:45] Closing thoughts. Recap of insights and encouragement to subscribe to The Private Equity Podcast.

Thank you for tuning in!

Connect with Cari here.

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Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com.

The Growth of the Private Equity Secondaries Market and What is Coming with Cari Lodge

The Private Equity Podcast, by Raw Selection