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Secondaries volume sets record high in H1

Secondaries transaction volume reached $17bn for the first half of the year, making the market very seller-favourable, according to Cogent Partners managing director Todd Miller.

Transaction volume on the secondaries market is set to reach a new high in 2014, after volume in the first half reached $16 billion, compared to $7 billion during the same period in 2013, according to a report from alternative asset-focused investment bank Cogent Partners.

Full-year volume is on track to increase by 10 percent from 2013’s levels. Total volume was $27.5 billion last year. Volume is expected to continue to gain pace in the second half of the year and exceed the $30 billion mark for the first time in history.

Financial institutions (including insurance companies) and general partners (through GP-led transactions) were the most prominent sellers during the first half of the year. Together they accounted for 49 percent of the market’s transaction volume.

Todd Miller
Todd Miller

The market also benefited from the combination of dry powder held by secondary buyers and readily available financing options that created an unprecedented level of purchasing power in the market. Therefore, rising prices made the market very seller-favourable, Cogent managing director Todd Miller explained in a statement.

“We expect the expanding buyer universe and growing pool of available capital to help sustain these high pricing levels and stimulate seller activity through the second half of 2014,” he said.

The average high bid across all strategies was 93 percent of net asset value during the first half of the year, according to the report. Buyout fund pricing generated the highest average, reaching 100 percent of NAV for the first time since 2007.