The Deal Between CPP Investments and Ardian May Signal an Opening of the Secondary Market

Sellers and buyers can finally agree on a price point for stakes in private equity funds.


Illustration by II

Ardian’s acquisition of a $2.1 billion secondaries portfolio from CPP Investments may be a sign that the market for stakes in private equity funds is about to get more active.

“The market has definitely improved on multiple fronts in the last three to six months,” said Dushy Sivanithy, head of secondaries at CPP Investments during a video call. “The bid-ask spread in 2022 was very high, as a result, transaction volumes were very low. You’ve seen that narrow over the course of 2023. You’ve seen a material increase in sellers.”

Indeed, a Jefferies analysis of the secondary market in the first half of 2023 found that average pricing for transactions was 84 percent of the net asset value of the fund, a 6 percent increase from the second half of 2022. Meanwhile, fundraising has pushed the level of dry powder — cash available to be invested — to about $220 billion.

Sivanithy (and CPP Investments) have seen this firsthand. The Candian pension plan, which oversees C$576 billion, has C$147.5 billion in private equity holdings alone. CPP Investments has a robust secondaries team that Sivanithy characterizes as an active buyer in the market. In CPP Investment’s second-quarter results, the pension highlighted two recent acquisitions, including a purchase of a US$100 million commitment to Oak Hill Capital Partners V and a US$50 million investment in ServiceTitan via both equity financing and a secondary transaction.

The firm is an active seller, too. Over the past five years, CPP Investments has inked seven secondary deals of varying sizes, including this most recent sale. According to Sivanithy, this market participation helped CPP Investments time the recent deal.

“It allowed us to spot a good window to take a portfolio to the market for sale when we saw improving pricing,” he said. “There were a number of buyers that were keen to look at a portfolio at scale.” CPP Investments chose to take advantage of this opening and moved quickly, which Sivanithy said caught investors’ attention.


Between 20 and 30 investors initially looked at the deal in a process led by Jefferies. The portfolio went through two competitive auction rounds: in the first, some participants only bid on a subset of the portfolio.

CPP Investments plans to put the $2.1 billion in proceeds back to work in the fund and allocate it across strategies. “This is a portfolio management tool,” Sivanithy said. “We’re trying to right-size certain exposures. It’s a chance to remove some legacy exposures.”

Sivanithy expects the secondaries market to loosen up further in the months to come. More investors are coming to market now, particularly pension plans that have overallocated to private equity. They now are looking to offload some of their longest-held assets to free up liquidity for new allocations.

“The conditions are right for a well-functioning secondary market in terms of sellers that need liquidity and well-capitalized buyers willing to provide it to them,” Sivanithy said.