The fast lane that ate the price-check

The secondaries market's exit door has become an on-ramp for endowments that don't price software the way Coller did.

Carrick Capital's continuation vehicle for its Saviynt software holding is the current expression of that shift. According to PWD's records, the vehicle carries a $255 million rollover, roughly 43 percent of the new fund, and an 11x mark on the asset inside. The rollover is the money existing limited partners choose not to take as cash; instead they stay in a new fund at the sponsor's valuation. That is a meaningful signal of belief in the mark, and it comes at a moment when HarbourVest's dataset shows global buyout returns turning negative in the first quarter.

The juxtaposition is uncomfortable. A software-heavy fund priced at 11x in a quarter when the broad buyout benchmark lost value is a mark that needs work. A few years ago it would have received that work in the due-diligence war room of an independent secondary house. The question is whether any independent house is still in the room.

Coller's absorption into EQT, completed in the $3.2 billion combination, is the most concrete sign of the thinning. The London firm was 36 years old, long enough to have built a franchise around buying other people's assets at a discount. As part of a large sponsor it may still do important work, but the negotiation between a sponsor's desire to extend a fund and an independent price-checker's caution will no longer happen under the same roof.