Secondaries deal flow is expected to remain steady during the first half of 2015 across all asset classes, but particularly across private equity and infrastructure, according to a recent report from Partners Group.
In the private equity market, transaction volume has been driven by portfolio management activities, regulatory factors and an increasing number of non-intermediated deals as sellers are becoming more familiar with the secondary market and non-traditional deals.
“The share of non-standard transactions (such as portfolio restructurings/direct secondaries) is likely to increase further, presenting an opportunity for experienced buyers,” Partners Group stated in the report.
In infrastructure, deal flow has remained steady because banks and insurance companies are continuing to divest illiquid assets to meet regulatory requirements.
Secondaries deal flow in Europe’s brownfield market – purchasing or leasing existing facilities for new production activity – has remained attractive because these investments are otherwise highly-priced, the firm explained.
“Partners Group views the European infrastructure secondaries market, especially for mature portfolios, as attractive because it provides investors who follow a proactive and systematic approach to sourcing with access to a larger number of otherwise limited brownfield infrastructure investment opportunity ” Marc Meier, a vice president at Partners Group told Secondaries Investor.
On the real estate secondaries market, Partners Group is eyeing mature tail-end secondaries acquisitions, which offer a shorter duration of investment characteristics.
“We continue to devise custom tail-end solutions to satisfy investors’ desire for liquidity,” the firm stated. “We’re [also] seeing more public pension plans looking to part with legacy investments, much like they already do with private equity.”