How Much is Really Going Into Secondaries?


November 21, 2013

Private equity firm Ardian said on Wednesday it had spent USD 4.3 billion on acquiring stakes in buyout funds since September last year, according to Reuters.  This large figure for just one fund manager in the market makes it clear that there is still some dealmaking underway.


It also shows that there is not a lot of certainty in the trend figures announced by the likes of Setter Capital and Cogent Partners who track dealmaking in the secondary market. Is dealmaking declining or growing? It is not clear.


On the one hand, industry insiders are saying things like, “Assets seem pretty sticky in owners’ hands todays sellers”, implying that sellers have the attitude of holding because they believe they can get a higher price and higher NAV in the future, according to a new PEI Secondaries Whitepaper, entitled Waiting for the Tide.


On the other hand, some of the world’s most experienced secondary investors are raising massive new funds in anticipation of a healthy dealflow, according to PI Online here and here. There is also the fact that there are growing number of secondary deal platforms, more than four at our last count, which suggests there is quite a bit of activity underway..

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