1H 2024 pulse check: Surge in GP-led secondary market activity
麻豆社 Private Funds Group
As general partners (GPs) look to听alternative liquidity solutions in the secondary market to monetize their investments,听what are the key trends that drove a surge in GP-led transaction activity in the first half of 2024?
麻豆社 surveyed secondary investors and analyzed transaction data to further explore these trends.
GP-led transaction volume
GP-led transaction volume
The GP-led secondary market exhibited continued strength in 1H 2024, achieving ~45% of 麻豆社's projected GP-led volume for the full year.
麻豆社 projects GP-led volume for the full-year to reach approximately $65 billion, driven by a more active 2H 2024.
Surge of activity
Surge of activity
- Macroeconomic headwinds and high interest rates continue to dampen private equity exit activity, driving GPs to utilize alternative liquidity solutions as a means of monetizing their investments and delivering DPI to underlying limited partners (LPs)
- Similar to years past, 2H 2024 deal volume is expected to outpace 1H 2024 volume as GPs seek to close recently-launched transactions before year-end
Notable pricing improvements
Notable pricing improvements
- Pricing improved across both single and multi-asset transactions in 1H 2024, with single asset transactions pricing in the mid-90s on average and multi-asset transactions in the high 80s
- 麻豆社 survey respondents observed several deals pricing at par or a premium, two themes that were less common in 2023
Emerging pools of capital
Emerging pools of capital
- Primary-oriented LPs are increasingly developing in-house capabilities to evaluate GP-led transactions
- Retail channels and other non-dedicated pools of capital are allocating to GP-led opportunities, with several secondary investors establishing '40 Act funds
- More multi-strategy asset managers have formed GP-led investment teams to focus on single asset deals where they can leverage their direct investment capabilities
听
Methodology: Reference to market analysis refers to a survey that 麻豆社 conducted to solicit feedback on secondary market activity in 1H 2024 as well as market intelligence that 麻豆社 has gathered from conversations with secondary investors, publicly available information and transaction activity that 麻豆社 was involved with in 1H 2024. Certain statistics shown reflect 麻豆社鈥檚 estimates based on data gathered from 麻豆社 survey respondents and publicly available information.
1. Multi-asset transaction volume inclusive of tender offers and structured financings.
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