New Morgan Stanley AIP Fund Focuses On PE Secondary Market

Jul 1 2013 | 11:08am ET

Morgan Stanley's fund of funds unit, Alternative Investment Partners, has raised $770 million for a fund dedicated to acquiring interests in private equity funds in the secondary market.

Commitments for the Morgan Stanley Global Secondary Opportunities Fund LP II exceeded AIP's initial $600 million target. Investors include existing AIP clients and new limited partners, such as endowments, foundations, public and corporate pension plans, family offices, insurance companies and high-net-worth individuals.

The new fund will target off-market secondary opportunities across the private equity spectrum, with an emphasis on small- and mid-cap buyouts and special situations funds. GSOF II will seek diversification by managers, strategies, regions, vintage years and portfolio companies.

“We believe substantial opportunities continue to exist in areas of the market where we focus and that our solutions-based approach to secondary investing will remain attractive to both sellers and general partners through all phases of the economic cycle. We recently completed several restructuring deals and believe these types of deals are an ever-important and growing part of the broader secondary market,” said Jon Costello, senior portfolio manager for the AIP private equity secondary team, in a statement. 

“We continue to be a buyer of secondaries across our platform and will continue to focus on what we believe are less efficient segments of the secondary market globally.”

GSOF II is the successor fund to AIP’s 2009 vintage secondary fund, Morgan Stanley Global Secondary Opportunities Fund I LP, a $585 million fund that completed its investment program in 2012.

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