Inside UBS’ latest market intel

UBS gave us an exclusive peek at its secondaries market buyer report.

Last week UBS gave us an exclusive peek at its secondaries market buyer report.

Based on the investment bank’s survey of 80 secondaries buyers earlier this year, the report provides up a number of data points that reflect the rapidly changing marketplace so many insiders have been buzzing about. Here are some of the headline findings:

  • Fundraising’s still feverish: UBS saw over 30 buyers seeking in excess of $25 billion last year.
  • Dry powder from previously raised funds hit at an all-time high of $45.8 billion, an increase of just over 8 percent, or $3.5 billion, from 2012. But it’s still (largely) in the coffers of an elite few: UBS found the largest 15 buyers accounted for 76 percent of all secondaries dry powder, compared to 71 percent the prior year.
  • It seems there’ll be no problem putting all that capital to work: UBS estimated 2013’s private equity secondaries transaction volume was $26.5 billion and expects an increase this year. That is on par with figures put out by Cogent ($27.5 billion), Evercore ($27 billion), Setter ($28 billion) and other advisory groups – and of course, there remain many unreported/unrecorded secondaries deals globally.
  • The types of deals are changing. Buyers increased their appetite for less traditional transactions last year, including GP-led fund restructurings (the aggregate amount of NAV acquired in such deals last year was more than $2.8 billion). Meanwhile large, intermediated portfolio sales have become less prevalent.
  • Auctions that are taking place have gotten more competitive. Buyer’s hit rates last year declined “meaningfully” to 20 percent from 30 percent in 2012.
  • Brokers are now executing an increasing number of deals for the buyside but their services were used slightly less overall – perhaps speaking to the trend of LPs starting to buy and sell secondaries directly. In 2013, 52 percent of transactions were intermediated (across buy/sell-sides), compared to 57 percent in 2013, UBS found.
  • Structuring transactions has also become more complex, as more lenders make debt available to buyers and increasingly allow deferred repayment structures (roughly 20 percent of all deals last year included deferrals). [LINK] 

The findings put more quantitative evidence behind the constant chatter about a market in flux. How do these data points compare with your experience? Drop me a line at or come down and have a chat at our next networking event.