Is Nordic’s really the world’s largest GP-led secondaries deal?

“The world’s largest GP-led secondaries deal” was how press releases described Nordic Capital‘s restructuring of its 2008-vintage fund when it closed on 19 April.

With €2.5 billion worth of net asset value being moved into a five-year continuation vehicle, the deal is certainly a mammoth secondaries transaction and marks a watershed moment in how primary managers use the secondaries market. But is it really the largest GP-led?

“It’s a tricky one,” says Cyril Demaria, head of private markets at Wellershoff & Partners and author of Private Equity Fund Investments: New Insights on Alignment of Interests, Governance, Returns and Forecasting. The size of a deal is usually defined by the amount of NAV including any discount or premium, plus the unfunded commitments, he says. Any fresh money for new investments would also be included when determining a deal’s total size, such as in a stapled deal where investors commit primary capital to a blind-pool fund alongside buying exposure to existing assets.

In Nordic’s case, Coller Capital and Goldman Sachs Asset Management purchased €1.5 billion ($1.83 billion as of Wednesday’s exchange rate) worth of NAV – the amount of exposure that traded hands. Just how much of the remaining €1 billion, backed by existing limited partners in Nordic Capital VII, will be used for add-on investments is unclear.

Taken on NAV trading hands and primary capital alone, Ardian‘s deal with Abu Dhabi’s Mubadala Capital last year is Nordic’s main contender. In that deal, the Paris-headquartered firm acquired $1.75 billion in NAV and committed $750 million to a blind-pool fund managed by Mubadala, which became a GP managing third-party capital for the first time. At $2.5 billion, the deal is 39 percent larger than Nordic’s.

The lack of an industry standard definition on whether fresh capital for add-on investments to an existing portfolio should be included when determining total deal size makes the situation even trickier, Demaria says.

“Overall, the borders are becoming quite blurry,” he says. “With longer denominated funds and some actors raising annual pockets or sleeves, it’s blurring whether it’s a primary or secondary, or mix of the two. Sometimes there’s an umbrella on top so when you buy into a sleeve you get access to the previous one. It’s increasingly difficult to qualify.”

What is clear is that Nordic’s has become the world’s largest private equity GP-led restructuring – and that is a noteworthy development. Peru’s Enfoca Investments, which in January closed the $950 million restructuring of three of its funds, held the previous title.

In a part of the market that is constantly evolving, Nordic might not hold on to the title for long.