Altius Associates, the global advisory firm and fund of funds, says more than $50 billion-worth of bank-held private equity assets should start shifting into the secondaries market this year.
“While not all of this will be sold, changing regulations will force many institutions to contemplate a sale in the coming years,” the firm said in a report detailing various trends and predictions for 2014.
Altius said much of 2013’s slowdown in deal activity was due to a lack of large portfolio sales that tend to drive the market. “Often financial institutions are the source of these larger transactions and several fund managers and brokers have mentioned that there are a number of sizeable transactions either in the market or expected to come to market soon,” the report said.
The firm also noted that secondaries markets should benefit from the general recovery in primary fundraising.
“Last year was marked by a slowdown in the secondary market, and while it is difficult to predict future volume, the underpinnings for a more robust market remain in place and investor interest in the space remains high,” said Chason Beggerow, Altius’ head of secondary investments. He added that secondaries managers should see a substantial opportunity in fund restructurings and secondary direct transactions this year.