Morgan Stanley Investment Management, the asset management arm of Morgan Stanley with $200 billion in alternative assets business, raised $2.5 billion for Ashbridge Transformational Secondaries Fund II – Ashbridge II -, focusing exclusively on single-asset GP-led continuation vehicles in the middle market.

Fund II, providing yet more evidence of investor appetite for vehicles that offer LPs an exit avenue from their private equity commitments, is about four times larger than Fund I, which closed in 2018 on $674 million.

The fund’s strategy is to invest in the highest performing assets in middle market private equity funds, providing general partners with additional time and capital to execute on the value creation strategy and giving limited partners the option to take liquidity or maintain their exposure and capture potential upside.

“The secondaries market has more than tripled in size since 2011, with GP-led secondaries representing approximately half of the market as sponsors seek solutions for longer hold periods,” said Nash Waterman, Managing Director and Head of Morgan Stanley Private Equity Secondaries.

The Morgan Stanley Private Credit & Equity business has $40 billion in assets. The firm has committed $3.6 billion in GP-led single assets secondary transactions since 2006.

The close follows Blackstone’s Strategic Partners IX, which closed on $22.2 billion in January, making it the world’s largest secondary fund since Ardian closed its $19 billion vehicle in 2020.