Welcome back to The Private Equity Podcast, by Raw Selection. In this week's episode, Alex Rawlings speaks with Cari Lodge, a seasoned investor with 25 years in private equity secondaries. They explore the market’s rapid growth from $2 billion to $160 billion, the increasing need for liquidity, and how secondaries optimize portfolio management. Cari discusses GP-led secondaries, continuation funds, and the market’s evolution, offering key insights into future opportunities in this space. Breakdown: [00:00] Introduction to the episode and guest, Cari Lodge, Managing Director and Head of Secondaries at CF Private Equity. [00:28] Cari’s background, her start in secondaries, and how the market has expanded from $2 billion to $160 billion. [01:45] Common mistake in private equity: Holding assets too long. How increasing holding periods from 5.7 years to 6.7 years impacts returns. [03:34] Why firms miss exit opportunities. The importance of DPI and how delaying exits can lead to the same returns years later. [04:29] Explanation of secondaries for newcomers. The role of LP secondaries, GP-led solutions, and the growing demand for liquidity. [06:53] The benefits of secondaries for investors, including diversification, shorter duration, and strong IRRs and ROIs. [08:49] Demand for GP-led secondaries, continuation funds, and LP transactions. How secondaries are now part of active portfolio management. [10:42] The future of secondaries. Market expected to grow from $160 billion to $200–220 billion in 2024, but constrained by capital and human resources. [12:33] Challenges holding the market back. Capital constraints, lack of resources, and evolving perceptions of secondaries. [14:21] Why Cari loves the secondaries market. Exposure to 1,200+ private equity funds, constant evolution, and a collaborative industry. [17:12] Key trends in private equity. The impact of higher interest rates, valuations, and the growing focus on liquidity solutions. [20:32] Secondaries' role in providing liquidity. Now contributing 15–20% of total private equity liquidity. [22:28] How secondaries adapt to market cycles. Benefits in both up and down markets, shifting from a distress play to a mainstream strategy. [23:22] Cari’s recommended reads: The Economist, Private Equity Analyst, and What It Takes by Steve Schwarzman. [25:14] How to reach Cari Lodge. Best contact method: LinkedIn. [25:45] Closing thoughts. Recap of insights and encouragement to subscribe to The Private Equity Podcast. Thank you for tuning in! Connect with Cari here . To get the newest Private Equity episodes, you can subscribe on iTunes or Spotify here. Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to
[email protected].
