March 8, 2023
4 reasons GP-led secondaries are here to stay
GP-led secondaries emerged from obscurity a decade ago to claim half of today’s private equity secondary market. Learn why they’ll play a big role in the future.
Private markets—stability amid uncertainty
After nearly a decade of subdued inflation, the COVID-19 pandemic and geopolitical events have brought back significant price pressures. The impact of inflation—and rising interest rates—has been swift and acute this year with equities and fixed income selling off in unison, something not seen for a number of years. While private markets may not fully escape the heightened volatility seen in public markets, history shows private assets can provide robust diversification benefits and improve the overall risk/return profile of a portfolio due to their structural advantages compared to public markets.
An alternative source of returns
Private assets can help to diversify investment portfolios and offer potential capital growth to help meet long-term goals.
- With typically low correlation to traditional asset classes, private markets can provide valuable diversification in a portfolio.
- Inflation protection and yield can come from steady, predictable cash flows.
- History shows private markets tend to offer differentiated, higher expected returns related in part to an illiquidity premium.
- Some private markets can also offer investors a way to align with their sustainable investing goals and concerns.
Source: Data for timberland refers to the NCREIF Timberland Index, as of December 31, 2021. Data for farmland refers to the NCREIF Farmland Index, as of December 31, 2021. Data for commercial real estate refers to the NCREIF Property Index, as of December 31, 2021. Data for U.S. private equity refers to the Cambridge Associates Private Equity Index, as of December 31, 2021. Data for infrastructure refers to the Cambridge Associates Infrastructure Index, as of December 31, 2021. Data for corporate bonds refers to the Ibbotson series IA SBBI U.S. LT Corp TR USD, as of December 31, 2021. Data for U.S. Treasury bills refers to the Ibbotson series IA SBBI U.S. 30 Day Tbill TR USD, as of December 31, 2021. FTSE World Government Bond Index, as of December 31, 2021. The S&P 500 Index series is from Standard & Poor’s Financial Services LLC, as of December 31, 2021. MSCI World Index, as of December 31, 2021. MSCI Emerging Markets Index, as of December 31, 2021. Commodities refers to the Goldman Sachs Commodity Index, as of December 31, 2021. Diversification does not guarantee a profit nor protect against loss in any market. Past performance is no indication of future results.
Webinar
GP-led secondaries—motivations, mechanics, and outcomes
The rise of GP-led secondaries has captured the attention of institutional investors. Global Co-Heads of Secondaries Paul Sanabria and Jeff Hammer answer key questions regarding one of the most talked about topics in the alternative investment space.
Investing in carbon-focused timberland
Eric Cooperström, managing director of our impact investing and natural climate solutions, shares the investment opportunities offered by carbon-focused timberland in this Q&A and six-minute video interview, recorded at the annual BAI Alternative Investor Conference, Germany.
A specialist approach
For decades, we've employed private markets strategies to enhance portfolio diversification and pursue attractive risk-adjusted returns. Today, we offer our institutional and high-net-worth clients access to leading capabilities across a range of private asset classes. At the same time, our size and position in the marketplace afford access to a broad investment platform and market insight that are essential for success.
Four decades of achievements
1985–1999
1985
Timberland
Launch of timberland business for clients under Hancock Timber Resource Group
1990
Agriculture
Launch of agricultural business for clients under Hancock Agricultural Investment Group
1998
Junior credit
Launch of first junior credit fund
2000–2009
2002
Junior credit
Launch of second junior credit fund
2004
Junior credit
Launch of third junior credit fund
2007
Junior credit
Launch of fourth junior credit fund
2010–2014
2010
Timberland
Launch of 10th timberland fund
2004
Real estate
Launch of Canadian real estate fund platform
2012
Timberland hits $10 billion AUM
Junior credit
Launch of fifth junior credit fund
2014
Real estate
First U.S. real estate co-invest with European insurance client
2015–2018
2015
Canadian real estate fund hit $1.9 bllion AUM
Standard Life acquisition adds $1.1 billlion through second fund to existing $800 million AUM
2016
Manulife U.S. REIT¹
Listed on the Singapore Exchange as the first pure-play office REITs listed in Asia
Private equity
Launch of first private equity co-invest fund
2017
Real estate equity hits $15.0 billion AUM
Real estate
Launch of first U.S. real estate fund
Senior credit
Launch of senior credit investment capability
2018
Agriculture hits $3.0 billion AUM
Timberland and farmland
Launch of first combined commingled vehicle across both timberland and agriculture
Infrastructure equity
Launch of first $2.0 billion infrastructure fund
Junior credit
Launch of sixth junior credit fund
2019–2021
2019
Private equity
First fund-of-fund closes with over $1.3 billion total commitments
Secondaries
Launch of secondaries investment capability
2020
Private equity
Launch of second private equity co-invest fund
2021
Infrastructure equity hits $10.0 billion AUM
Private equity and credit hits US10.0 billion AUM²
Senior credit
Launch of first direct lending fund
Infrastructure equity
Close of second $4.65 billion infrastructure fund
Important disclosures
All assets under management (AUM) are calculated on a fair value basis in U.S. dollars (USD); AUM and years of experience are as of September 30, 2022, unless otherwise noted. Data includes assets managed by Manulife Investment Management and its affiliates on behalf of Manulife's Canadian and U.S. general accounts and also certain discretionary and nondiscretionary third-party investors. 1 Not available to all investors. 2 U.S. Private Asset opportunities are offered to U.S. institutional investors through Manulife Investment Management Private Markets (US) LLC (Manulife IM PM (US)), a U.S. Securities and Exchange Commission registered investment adviser with $35.7 billion in AUM. Manulife IM PM (US)’s Private Equity and Credit Group manages $4.6 billion on a discretionary basis and $2.7 billion on a nondiscretionary basis.
2023 Private Makets
Annual Investor Conference
This conference provided an unique opportunity to bring all our private markets clients together at our historic Toronto headquarters in one of the world’s most enterprising cities.
Private equity co-investing
Why robust sourcing and effective investment selection are the ingredients for success
Our capabilities
Innovation and accelerated growth · Decades of experience investing in private markets · In excess of $100 billion in assets under management and administration³ · More than 250 alternative investment professionals globally³
Private equity and credit
Over 20 years of private equity and credit experience investing in and alongside high-quality middle market sponsors
$20.7 billion in AUMA⁴
20+ years of experience
Real estate
Sustainably managing over 63.1 million square feet of commercial property across 11 countries and 29 cities in the United States, Canada, and Asia
$20.4 billion in AUM
95+ years of experience
Timberland
As the world’s largest timberland investment manager,⁵ our experience, size, and scale allow us to access a wider array of markets with reduced operating risk
$10.4 billion in AUM⁶
35+ years of experience
Infrastructure
As an early entrant to the asset class, our team is highly experienced and specialised with roots dating back to the late ‘80s and leadership that has been in place since the early 2000’s
$12.6 billion in AUM⁷
35+ years of experience⁸
Agriculture
As a leading, fully integrated agriculture investment manager,⁹ we oversee more than 400,000 acres of prime farmland in major agricultural regions in the United States, Canada, Chile, and Australia
$4.2 billion in AUM¹⁰
30+ years of experience
Important disclosures
All assets under management (AUM) are calculated on a fair value basis in U.S. dollars (USD); AUM and years of experience are as of September 30, 2022. Data includes assets managed by Manulife Investment Management and its affiliates on behalf of Manulife's Canadian and U.S. general accounts, as well as certain third-party investors. Investment advisory services to third-party investors and certain affiliated investors are offered by Manulife Investment Management Private Markets (US) LLC (Manulife IM PM (US)). Of the AUM figures shown for Manulife IM PM (US) entities, the private equity and credit team manages $4.7 billion in AUM on a discretionary basis; the real estate equity team manages $0.9 billion in AUM on a discretionary basis; and the infrastructure team manages $3.3 billion in AUM on a discretionary basis.
3 As of September 30, 2022. AUM figure includes $49.6 billion managed by the general account investment team. The methodologies used to compile the total AUM are subject to change and may not reflect regulatory AUM as reported on certain affiliates' Form ADV. 4 Represents assets of North American corporate finance and the private equity and credit group and can include committed capital and unfunded commitments of $6.0 billion. 5 RISI, Inc. 2021 data based on top 15 global Timber Investment Management Organizations (TIMO) by AUM. Manulife pays a subscription fee for access to the database. 6 Represents assets of Manulife Investment Management’s timberland group, managed on a discretionary and nondiscretionary basis for the general account, its affiliates, and third-party clients. 7 Represents assets of Manulife Investment Management’s infrastructure equity group. 8 Experience of North American corporate finance. 9 Highquest Partners LLC. Based on largest total agriculture assets under management according to the Global AgInvesting Rankings and Trends Report 2019. Most recent data available. Manulife pays a subscription fee for access to the database. 10 Represents assets of Manulife Investment Management’s agriculture group managed on a discretionary and nondiscretionary basis for the general account, its affiliates, and third-party clients.
A commitment to sustainability
Responsible stewardship of our clients' capital is integral to our business and culture, and we seek to be a global leader in creating long-term value for our stakeholders. The incorporation of ESG considerations starts with the integration of ESG factors into our investment analysis and due diligence process. In segments where we own and operate assets, we hold ourselves to a high standard of stewardship and sustainability. We do this to both protect and grow the value of those assets and for the benefit of the communities they touch. Where we don't directly own assets, we're committed to intensive due diligence and engagement with our partners and asset owners.
We've achieved our commitment to be 100% certified to the Leading Harvest Farmland Management Standard for our U.S. farmlands.¹¹
We manage 5.8 million acres of timberland, of which 100% is third-party certified and have protected over 479,000 acres of sensitive lands.¹²
Nearly 50 million square feet—82% of our real estate equity portfolio—is certified to a green building standard, such as LEED, ENERGY STAR, or BOMA BEST.¹³
Our infrastructure team has invested approximately $2.0 billion in the renewables space.¹⁴
Important disclosures
Figures include discretionary and nondiscretionary assets managed on behalf of the general account, its affiliates, and third-party clients. 11 Certification as of May 17, 2021, by Leading Harvest and is based on an annual assessment of the conformation to the Farmland Management Standard. Most current data shown. Please see https://www.leadingharvest.org 12 As of December 31, 2021. 100% of our forests were certified under either Sustainable Forestry Initiative® (SFI®) (3.6 million acres in the United States and Canada) or Forest Stewardship Council® (FSC®) (2.2 million acres in Australia, New Zealand, Brazil, and Chile). Most current data shown. 13 Rating is as of December 31, 2021. Based on square footage or building size of the gross floor area of properties in the global portfolio. Totals from different certification standards do not sum as properties with multiple certifications are only counted once. Certifications are provided by LEED, ENERGY STAR Certification, BOMA BEST, GBCA Greenstar, BCA Green Mark, NABERS, Casbee, BOMA360, Fitwel. 14 As of March 31, 2022, in USD. The infrastructure team manages renewable energy-related private equity investments on behalf of external clients and the insurance business of Manulife.
Related viewpoints
January 24, 2023
Inflation, interest rates, and recession risk: farmland’s resilience in the face of uncertainty
Farmland investment performance has shown historical resilience in periods of economic disruption—how will it fare as risks of a near-term recession rise?
December 20, 2022
Exploring timberland investment opportunities in Brazil
Brazil is attracting greater interest from sustainable timberland investors around the globe, as it’s home to some of the most favorable conditions for eucalyptus, a fast-growing hardwood species used in the production of bleached eucalyptus kraft pulp, the most used market pulp in the world.
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Contact us
Christos Tsaravas
Head of Distribution, EMEA
+41 44 214 69 31
christos_tsaravas@manulifeam.com
Martin Powis
Head of Institutional, UK and Ireland
+44 (0)20 7256 3753
martin_powis@manulifeam.com
Nicole Kudlek
Head of Distribution, Germany
+49 (173) 2803045
nicole_kudlek@manulifeam.com
Important information
We consider that the integration of sustainability risks in the decision-making process is an important element in determining long-term performance outcomes and is an effective risk mitigation technique. Our approach to sustainability provides a flexible framework that supports implementation across different asset classes and investment teams. While we believe that sustainable investing will lead to better long-term investment outcomes, there is no guarantee that sustainable investing will ensure better returns in the longer term. In particular, by limiting the range of investable assets through the exclusionary framework, positive screening and thematic investment, we may forego the opportunity to invest in an investment which we otherwise believe likely to outperform over time.
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