Baar, Switzerland-based secondary investor, Montana Capital Partners (mcp), says in its latest market update that prospects are looking good this year for investors in secondary buyouts. It is not the only one saying that. The Deal in a commentary says that secondary transactions are now more acceptable than ever, while the FT reports that the secondary market hit a landmark in recent months, with 165 deals done.
Over the past half year, mcp processed dealflow of more than 50 transactions in its “sweet spot” of smaller transactions (below USD 15 million). In total, the opportunities it is considering were on average 75% funded. Proportionally by strategy, buyouts dominated representing 80% of dealflow.
A good 60% were sourced directly from the seller. mcp hopes to be able to two in the first half 2012. The firm also said that pricing “seems to have stabilized” on an average level of 10 to 20% discount to net asset value based on September valuations. The actual discount varies depending on the size of the stake at hand, the maturity of the portfolio, and the investment strategy, as well as other variables.
Montana Capital Partners is currently raising its Annual Secondary Program 2012 fund, targeting its preferred markets described above.