Last year was the secondaries market’s most active period, with deal volume jumping by around one-third from the previous year, according to intermediary NYPPEX Private Markets.
A total of $54.6 billion traded last year, more than quadruple the $12.3 billion recorded in 2009, according to excerpts from the firm’s 2018 Secondary Private Equity Market Trends and 2019 Outlook Report, seen by Secondaries Investor.
The figure is a 31.8 percent increase from the $41.4 billion NYPPEX recorded in 2017.
The firm did not disclose deal volume by asset class or strategy.
“The increase in secondary volume was driven by several trends, including more active portfolio management by LPs,” said Laurence Allen, managing member of NYPPEX.
NYPPEX’s figures are based on the firm’s deals and surveys from “various industry leaders,” according to the report. It includes secondaries trades across buyout, real estate, infrastructure, natural resources, fund of funds and venture capital strategies.
GP-led deals comprised around $17.4 billion or close to one-third of transaction volume, Allen added.
“More GPs are utilising the secondary market to generate exits, wind-up older funds or restructure older funds to raise capital for new vehicles,” he said.
North American institutional investors led last year’s big portfolio sales. Among such transactions were two in November: Ontario Teachers’ Pension Plan’s $1.7 billion portfolio sale to Canada Pension Plan Investment Board and Maryland State Retirement and Pension System’s sale of around $1 billion worth of stakes to Ardian.
The largest GP-led process last year was Nordic Capital‘s restructuring of its 2008-vintage fund, in which Coller Capital and Goldman Sachs Asset Management acquired €1.5 billion worth of assets that were moved into a new vehicle managed by Nordic.
Direct secondaries – trading stakes in private companies – rose 23.1 percent to $29.3 billion, up from $23.8 billion in the previous year, NYPPEX found.