Dry Capital Blog #2: Secondaries, Shifting Capital, and the Rising European Edge
April 1 2025In a financial world marked by uncertainty and tight liquidity, secondaries have stepped out of the shadows. Once seen as the quiet corner of real estate finance, secondaries are now a key lever for unlocking trapped value — and at Dry Capital, we believe they're shaping the next decade of smart investing.
Secondaries: The Strategy Built for This Cycle
Secondaries aren’t distressed — they’re strategic. They offer a way to access stabilized, diversified real estate portfolios.
Why now? Because the fundamentals are shifting:
Liquidity is constrained.
Interest rates remain elevated.
Fundraising in the traditional primary market is slowing.
Financing is limited.
In this environment, many managers are facing refinancing gaps, distribution shortfalls, and operational challenges. That’s where secondaries step in — recapitalizing funds, restructuring portfolios, and offering investors a faster path to value while helping managers preserve control and execute on long-term strategies.
Fundraising Trends: A Market of Two Speeds
Fundraising today is polarized. The largest global players continue to raise capital, often exceeding their targets. But smaller, mid-market managers are increasingly locked out of traditional fundraising routes, despite strong underlying strategies.
This disparity is creating opportunity. Secondary capital isn’t just helping investors rebalance — it’s helping managers stay in the game. Dry Capital is focused on providing targeted, flexible solutions in this space, stepping in where others hesitate.
The Tariff Effect: A Turning Point for Europe
The announcement of new U.S. tariffs on European goods — with proposed rates as high as 25% — is a clear signal that global trade dynamics are entering a more fragmented, protectionist phase. On the surface, it’s a headwind for European exporters. But underneath lies a compelling shift: global capital is starting to look elsewhere for consistency and value.
Europe, with its stable legal frameworks, discounted real estate pricing, and growing focus on sustainability, is increasingly viewed as a long-term opportunity — not a risk.
As the U.S. moves toward isolationist policies, investors are rebalancing portfolios, allocating more to regions that offer strategic calm amidst geopolitical noise. Europe, particularly in key cities and infrastructure-linked assets, is re-emerging as a priority.
Why This Matters for Dry Capital
We believe secondaries and European capital flows are deeply connected. As U.S. policies grow more uncertain, and as investors prioritize access, liquidity, and transparency, Dry Capital is doubling down on solutions that match the moment:
Strategic secondaries that solve real liquidity needs
Fund recapitalizations that preserve long-term value
Targeted deployment into Europe’s most resilient real assets
The goal? Not just to react — but to lead.
2025 will be remembered as the year capital realigned — away from legacy assumptions and toward sharper, more intentional strategies. At Dry Capital, we’re here for it.
Stay tuned.
