Schroders to Spend $1 Billion a Year On Secondary Private Equity

Schroders Plc plans to double the amount of money it invests in pre-existing private equity deals to around $1 billion a year, seeking to take advantage of a growing trend for buyout managers holding onto businesses for longer.

The London-listed firm is focused on general partner-led secondaries deals. Usually a buyout firm, also known as a general partner, needs to sell its portfolio companies after a set period and return money to its investors. In secondaries deals, Schroders replaces investors who want to cash out -- giving the buyout firm more time to improve the business’s valuation, all the while generating fees.