GP-leds dominate advisory firms’ 2017 activity

Secondaries advisory activity shifted heavily towards GP-led deals last year with these transactions accounting for the bulk of deal volume for most intermediaries, according to Secondaries Investor‘s annual survey.

Evercore, Campbell Lutyens, Lazard, Credit Suisse and Axon Partners saw GP-led or directs transactions comprise between 50-76 percent of their deals. All of Rede Partners’ deals were GP-led transactions.

“There is an increasing receptiveness of GPs, including highly successful GPs, to explore opportunities at this end,” Yaron Zafir, Rede’s head of secondaries and GP-led transactions, told Secondaries Investor. “At the same time LPs themselves increasingly understand the benefits of GPs leading with such initiatives and are generally less suspicious of them than they have been in the past.”

Greenhill Cogent, Evercore and Park Hill accounted for more than half of last year’s roughly $58 billion in deal volume. Greenhill Cogent worked on $11.9 billion across 62 transactions, Evercore on $10.1 billion across 42 deals and Park Hill on $8 billion across 25 transactions.

Deal volume was defined as purchase price plus unfunded commitments for transactions that closed between January and December, and data was submitted by advisors.

Campbell Lutyens, which advised on some of last year’s largest GP-led deals such as BC Partners’ $1 billion stapled deal with Lexington Partners, worked on $6.9 billion worth of deals across 14 transactions. Infrastructure accounted for almost 20 percent of its deals by asset class.

Firms continued to work on an increasingly diverse range of asset classes. Around a quarter of Credit Suisse’s more than $3 billion-worth of deals were real assets or other. The firm advised on 16 transactions.

Rede’s more than €500 million-worth of deals comprised 35 percent growth and venture, 18 percent mezzanine and the remainder buyout.

Lazard, which worked on around €5 billion worth of deals, had around half of its 17 transactions by number involving growth, venture or real estate funds.

The make-up of sellers also evolved last year, according to Lazard.

“We noticed a broadening of the type of financial sponsors involved in secondary transactions from those who had not raised a fund since the financial crisis towards those who had raised at least one,” Lazard noted.

Greenhill Cogent and London-based Elm Capital were the only two firms for which LP positions comprised a majority of deal volume, at 90 percent and 82 percent respectively. Elm, which advised on $1.5 billion worth of transactions across 25 deals, said it saw a “very large number of tail-end sales by funds of funds”.

Switzerland’s Axon Partners advised on €500 million worth of GP-led deals and €158 million-worth of LP stakes.

Firms including Triago, Cebile Capital, UBS, Setter Capital and Mercury Capital Advisors either declined to participate in the survey or did not return requests for comment.

Stay tuned for our law firm secondaries advisory survey in the coming week.