The consultancy group has become the latest to launch a service dedicated to helping pension schemes trade private assets on the secondary market.
The service, XPS Xchange, aims to connect DB schemes to a wide variety of potential buyers and sellers to help trustees “achieve optimum outcomes in line with their objectives on governance, value and timescales”.
The company claims its dedicated platform can potentially increase the value realised from a transaction by “up to 20%”, as well as securing significant savings on broker fees.
André Kerr, partner at XPS Group, said: “The illiquid asset market has grown exponentially over the last 20 years, but traditional transaction methods have often left clients with limited options.
“XPS Xchange was developed to improve outcomes around governance, value and timings. Our new approach provides buyers and sellers the widest possible range of options, empowering them to make informed decisions and achieve the best possible outcomes.”
The launch follows the introduction of similar services by providers including Isio and WTW.
Following the gilt market volatility in 2022, many DB schemes have found themselves significantly better funded, with endgame journey plans accelerated. This was reflected in the almost £50bn worth of insurance transactions completed last year, a record for a calendar year.
However, some schemes have found their ability to transact limited by exposure to illiquid assets such as private equity funds, infrastructure assets and real estate.
This has increased the importance of the secondaries market for private assets, which provides liquidity for those wishing to sell before the expected maturity date of their assets.
The secondaries market has been growing rapidly in recent years as the wider private markets sector has matured and older funds have sought to realise capital gains.
Data firm Preqin reported earlier this year that fundraising in the private equity secondaries market hit $93.8bn (£71.9bn) in 2023, up by 159% on the 2022 total. In April 2024, there were 181 secondaries funds with a combined fundraising target of almost $130bn.
Nearly two thirds (64%) of limited partners – which include pension funds – surveyed by Preqin said this area was the best opportunity for private equity investors.
Further reading
How schemes are solving illiquid asset issues (20 May 2024)
Pension trustees must state policy on investing in illiquid assets (29 September 2023)
