Awarding the firms at the forefront of secondaries innovation

Something feels different about the secondaries market this year.

In the GP-led part of the market, continuation funds are popping up left, right and centre. UK mid-market private equity managers have even gone as far as selecting continuation funds as their preferred method of exit, according to a survey by investment bank Numis in September.

In the LP-led market, institutional investors are becoming repeat sellers, as we chronicled last month. According to data from PJT Partners, 50 LPs have accounted for 50 percent of secondaries market deal volume over the last decade. Many of those investors have returned to the secondaries market this year.

On top of that, the age-old debate of whether the secondaries buyside is capitalised to a healthy degree continues. For those who believe there isn’t enough capital to back deals, consider this data point: according to research by Bain & Co, there was roughly $1.1 trillion in dry powder for buyout strategies as of July. Based on the amount of capital invested in buyout transactions last year – $654 billion – that’s a 1.68x capital overhang ratio. In other words, enough capital for 1.68 years of deployment.

In the secondaries market, there is as much as $220 billion in dedicated available capital – dry powder, near-term fundraising and available leverage – according to Jefferies. Taking Jefferies’ estimate of $108 billion in deal volume last year, that’s a 2.04x capital overhang ratio.

These are back-of-the-envelope calculations, of course, but they provide food for thought: is the secondaries market really as undercapitalised as some believe?

It’s against this backdrop of a maturing GP-led market, more LPs using secondaries sales in a programmatic way, and these questions around the overall market’s capitalisation that affiliate title Private Equity International wants to hear from you. The PEI Awards 2023 is now accepting submissions across 74 categories, including 12 related to secondaries. Which firms have stood out in GP-leds this year? Who has helped facilitate the most impressive LP sales? Which advisers and legal experts have been innovative to help grow the market?

The secondaries categories are:

· Secondaries Deal of the Year in Europe

· Secondaries Firm of the Year in Europe

· Secondaries Adviser of the Year in Europe

· Secondaries Law Firm of the Year in Europe

· Secondaries Deal of the Year in the Americas

· Secondaries Firm of the Year in the Americas

· Secondaries Adviser of the Year in the Americas

· Secondaries Law Firm of the Year in North America

· Secondaries Deal of the Year in Asia

· Secondaries Firm of the Year in Asia

· Secondaries Adviser of the Year in Asia

· Secondaries Law Firm of the Year in Asia

The PEI Awards seek to highlight those firms and institutions at the forefront of change and innovation. While the PEI Awards remain the only industry awards decided by the industry, it is PEI and Secondaries Investor editorial staff who put together the shortlists. We invite you to send details of how your firm has stood out in the past 12 months, and why you think you deserve to be shortlisted. Submissions close on Friday 10 November and voting begins in early December.

Find full details of the PEI Awards 2023 here.

Write to the author: adam.l@pei.group