Intermediated deals rose in 2015

Two-thirds of last year's secondaries deal volume was conducted through an intermediary, a 12% rise from the previous year, according to a Setter Capital survey.

The proportion of intermediated deals increased last year, according to a survey by Setter Capital.

Deals that involved agents working on either the buy- or sell-side last year increased to about 63 percent of total transaction volume by dollar value, according to the firm’s Secondary Market FY 2015 volume report. This compares with about 57 percent in 2014.

“We expect the level of intermediation to continue to rise in response to the entrance of new agents and as sellers struggle to stay on top of the ever-growing buyer universe,” the report noted.

Setter estimated total secondaries deal volume was $49.6 billion last year. The figure includes private equity, real estate, hedge funds, infrastructure and agri or timber strategies.

An intermediated deal is more likely to close, a partner at a global fund of funds told Secondaries Investor.

“If an intermediary is in front of an opportunity the likelihood of that transaction closing is very high,” the partner said. “The real asset market is intermediated but not quite to the same extent, and the conversion rate is lower.”

The report sought responses from the 117 most active and regular buyers on the secondaries market, with 85 agreeing to share their results.

Source: Setter Capital.