As more GPs look to the secondary market for ways to hold certain assets longer, Goldman Sachs is expanding its capabilities around advisory work for such deals.
To further this effort, the firm has hired Alex Mejia from Lazard, Goldman confirmed for sister title Buyouts. Mejia will start in May.
The firm recently jointly advised with Evercore on Thomas H Lee Partners’ single-asset secondary for wealth advisor HighTower Advisors. The Hightower deal closed on 3 December.
Goldman’s secondaries investment team is a co-lead on the HighTower deal along with Neuberger Berman and Coller Capital, sister title Secondaries Investor reported in October. To avoid conflicts, Evercore worked on an advisory basis with Goldman’s secondaries investment side on the deal, sources said.
“We feel like we can be differentiated in that we have a leading M&A franchise and some single-asset deals, even with two assets, are akin to M&A processes in terms of process, structure and tactics,” said David Kamo, managing director at Goldman.
Mejia will run the single-asset advisory focus, reporting to Kamo and David Friedland, partner and managing director at the bank. Mejia has worked at Evercore since 2016, before which he was a partner at Smithbridge Partners from 2009 to 2016, according to his LinkedIn profile. He worked at Credit Suisse in private equity from 2004 to 2009, his profile states.
GP-led deals are on the rise and are likely to become a much greater part of overall secondary activity, which has historically been led by LP fund stake sales. The market shutdown during the pandemic led to even greater interest for many GPs in finding ways to hold certain assets longer, especially as exit timelines were pushed out.
Single-asset secondaries, which generally involve one or two assets in an older fund, have become more popular in the past couple of years. They involve greater concentration risk for buyers, something that secondaries firms were reluctant to take on until fund sizes grew large enough to accommodate such risk.
Advising on such deals was a good fit for Goldman, Kamo said, as the bank can bring its banking expertise to bear, as well as its global reach in terms of finding investors for such deals.
“This is an attractive area of the market that we only expect to grow,” he said.
– This report originally appeared on sister title Buyouts.