Greenhill’s secondaries advisory unit has ‘record’ year

Greenhill’s secondaries advisory group had its best year of revenue amid a 28 percent rise in total secondaries market deal volume.

“On an absolute basis, our secondary capital advisory revenues increased year over
year to a record level,” the investment bank noted in a fourth quarter earnings statement on Thursday.

The firm closed nearly 80 secondaries transactions globally last year and advised on around $20 billion worth of deals, managing director Bernhard Engelien told the IPEM conference in Cannes on 24 January.

Capital advisory, including primary fundraisings and secondaries advisory, was around $66.5 million last year. The firm, which exited its primary capital business in early 2018, did not disclose the breakdown for secondaries.

Capital advisory as a percentage of Greenhill’s total advisory revenue decreased to 19 percent from 30 percent year-on-year.

On an earnings call on Wednesday, Greenhill chief executive Scott Bok said that the Cogent Partners business, which it acquired in 2015, had expanded since then and that the unit is more resilient to external factors.

“The business has grown a lot, really starting in 2017 and significantly more in 2018,” Bok said. “I don’t think it’s as cyclical as the M&A business in terms of when you get into a downturn or recession. I think, arguably, there may be more forced sellers of secondary interest in PE funds and so on.”

Greenhill said on Thursday it estimates there was $74 billion in deal volume last year, up from $58 billion a year earlier. GP-led deals drove this rise, with sponsors accounting for 32 percent of sellers by value.

The firm estimates there is $192 billion in near-term dry powder, including leverage.