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Greenhill retains top spot in crowded advisory field

Single-asset deals, preferred equity and asset-class diversity were among the themes to emerge in Secondaries Investor's annual advisory survey.

Greenhill came out on top again in Secondaries Investor’s latest annual secondaries advisory survey in a field marked by growing transaction volume and increasingly diverse deal types.

The firm worked on $18.2 billion of deals across 82 separate transactions last year, a value increase of 53 percent on the year before. Others had similar levels of growth, with Park Hill Group advising on $12 billion across 32 transactions, equivalent to a 50 percent increase in value on the previous year.

Evercore advised on 71 deals worth $13.1 billion, compared with $10.1 billion the previous year. On GP-led deals the firm noted a “significant increase in the level of take-up from LPs and a high level of transactions involving new capital raises”, particularly for follow-on investments.

Greenhill, Park Hill and Evercore accounted for more than half of last year’s roughly $74 billion in deal volume among them.

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

A majority of the intermediaries that replied to the survey advised on at least one preferred equity deal in 2018. An approaching market correction may be a reason for the uptick, according to Thomas Liaudet, a partner with Campbell Lutyens.

“There is a general feel that we are nearing some sort of downturn,” Liaudet said. “Is there a bit of that coming into peoples’ minds in the sense that a structured deal also helps mitigate the downside risk for a buyer?”

Campbell Lutyens advised on 15 deals last year worth $8.3 billion in total, up from $6.9 billion the year before. Infrastructure accounted for 34 percent of its transactions by asset class, with its spin-out of John Hancock’s infrastructure investment team being one of the largest GP-led deals of last year.

Firms continued to work on an increasingly diverse range of asset classes. Eaton Partners advised on five deals worth $1.2 billion, 29 percent of which involved intellectual property assets. The firm, which helped spin out a team along with 75,000 music copyrights into a new GP/LP structure named Lyric Capital I, expects to see further asset diversification this year.

Sixpoint Partners, which advised on $300 million-worth of transactions – all of which were GP-led – saw a larger of volume of energy-focused deals and expects the bid/ask to narrow in this sector and facilitate more volume.

Credit Suisse closed nine transactions worth $3 billion across private equity, infrastructure and energy. This included the £790 million ($1.04 billion; €916 million) spin-out of Standard Chartered’s captive private equity team, a deal backed by ICG Strategic Equity.

Rede Partners nearly quadrupled its transaction volume last year, advising on €2 billion-worth of GP-led deals. Among these were two single-asset transactions, including the process on the 2007-vintage TDR Capital II and its remaining asset, Stonegate Pubs.

Mercury Capital Advisors advised on $800 million of deals, noting an uptick in the number of quality GPs looking to invest in complex secondaries processes, a view shared by Rede.

For Greenhill and Switzerland-based Axon Partners – which advised on €210 million-worth of transactions – LP positions comprised a vast majority of deal volume, 90 percent and 100 percent respectively. Park Hill said it had an even split.

Harken Capital Securities closed $550 million of transactions in 2018, including two GP-led venture capital deals worth $200 million. “Not bad for a boutique firm like ours,” said secondaries head Nick Hatch.

Firms including Lazard, Triago, Houlihan Lokey and UBS either declined to participate in the survey or did not return requests for comment.