Specialist
Relationship manager at global financial advisory and asset management firm
Agenda
- Youth of secondary market, LPs’ (limited partners’) advisory developments and how this usage changes market perception
- Current LP-GP (general partner) fund dynamics and secondary market growth outlook
- Growth of fund managers and differing GP and LP concerns
- Likely progression of valuations across buy-out strategies, noting sectoral resilience and regional bifurcation
Questions
1.
What are your thoughts on the growth of the secondary market? How has it been evolving?
2.
What percentage of investors do you think might not be able to meet their unfunded obligations? What impact does that have?
3.
How do you think the current market is split between GPs [general partners] and LPs [limited partners]? I think you mentioned the market is USD 100bn or so right now.
4.
What percentage of the market do you think is currently GP-led and what kind of growth would you expect from those GP-led transactions YoY?
5.
What would drive growth on the LP side? Are there any variables we’re missing as key growth drivers for the GP side as well?
6.
Why do you think LPs can’t offer as attractive returns as what GPs can offer?
7.
Do you expect secondary fund volumes to grow? How do you expect them to grow in comparison to primary funds raised, and do you then think secondary volume would match primary?
8.
What percentage of secondary market sellers, or people looking to exit transactions they’re currently in, do you think may be forced sellers? How much stress do you think we’re going to see?
9.
Given what we’ve discussed, which vintages do you see as being most difficult or starting to trade at the highest discounts? What kinds of discounts are you seeing in the market now?
10.
What are current transaction volumes vs historical ones? How were buyer and seller negotiations taking place in 2022 and Q1 2023? What’s the motivation of sellers? It’s mainly liquidity, but what’s the key motivation?
11.
What are you seeing around current pricing and discounts? You said it’s typically between 40% and 60%, so we’ve spoken about vintage, but how much does manager quality or strategy change that? How much of an impact does that have?
12.
How willing are the sellers to transact quite substantial haircuts? What’s happening within negotiations currently, or is it that they’re forced?
13.
How would you quantify different haircuts from North America, LATAM, EU, UK, APAC and emerging markets?
14.
How do you see different portfolio strategies and sector focuses and their performance? I assume real estate is probably going through one of the tougher times at the moment, alongside growth tech, but where are you seeing the largest discounts by sector and focus?
15.
Is there anything else you’d like to highlight around the secondaries market?
