Astorg is working on a single-asset secondaries deal for more time and capital to manage its portfolio company IQ-EQ, sources told Secondaries Investor.
Limited partners in Fund V will be able to cash out of the asset or roll their interests into the continuation fund created to hold the asset, sources said. Lazard is working as secondaries adviser on the deal.
The single-asset process could have a total value in the range of €500 million to €800 million. The total value will depend on the level of LP sales.
It’s understood that IQ-EQ is a relatively new deal in the market and it’s not clear when it could go to Fund V LPs for a vote. An Astorg spokesperson did not return a request for comment.
Paris-based Astorg acquired IQ-EQ in 2016, when the company was called SGG, according to Astorg’s website. The firm announced the acquisition in 2015. Astorg acquired the company through its fifth fund, which closed in 2011 on €1.05 billion.
SGG rebranded as IQ-EQ in 2019, combining SGG, First Names Group, Augentius, Iyer Practice and Viacert under one brand. IQ-EQ provides compliance, administration, asset and advisory services to investment funds, global companies, family offices and private clients.
Astorg has grown IQ-EQ over the past few years. In June, it announced the add-on of Blue River Partners, a US provider of outsourced services to alternative asset managers.
Earlier this month, the company acquired Constellation Advisers, a co-sourced and outsourced investment management services provider. Following this acquisition, IQ-EQ’s US business totalled more than 320 US-based employees. The company boosted its global workforce to more than 3,400 people in 23 jurisdictions, with more than $500 million of assets under administration.
The IQ-EQ single-asset process is one of numerous such deals on the market or expected to come to market in the early part of 2021. The secondaries market has quickly moved from traditional sales of LP portfolios to transactions that give GPs more time with certain assets while allowing LPs in older funds to grab liquidity.
Single-asset processes, like all types of GP-led deals, have taken a large slice of deal volume since the pandemic. Buyers have been reluctant to dive into assessing large LP portfolios, with all the underlying assets they contain, as the market emerges from the pandemic downturn, making valuation challenging.
However, single- or concentrated-asset deals are easier to understand. And more GPs than ever are looking for ways to extend ownership over certain businesses, especially as the shuttered markets pushed out exit timelines for many companies.
Total deal volume for 2020 is estimated at around $60 billion, according to preliminary full-year deal volume numbers from Greenhill Cogent. GP-led deals like fund restructurings and single-asset processes accounted for $26 billion (44 percent) of that total, Secondaries Investor reported this week.
“The sheer number and associated volume of GP-led transactions…shows that such transactions have now become a mainstream liquidity pathway for GPs,” Bernhard Engelien, Greenhill’s co-head of European capital advisory, told Secondaries Investor. “This development is beneficial to both GPs and LPs and will contribute to the long-term growth of the asset class.”
– Adam Le and Rod James contributed to this report.