Single-asset transaction volumes are likely to hit a record level in 2021 and will only grow in prominence, according to Evercore.
Transactions focused on a single company accounted for a quarter of all secondaries deals by volume in the first half, equivalent to $12 billion, according to the investment bank’s half-year secondaries market review. This compares with $14 billion for full-year 2020.
“GP-led transactions are clearly now in the ascendency,” senior managing director Nigel Dawn told Secondaries Investor, adding that Evercore expects the volume of single asset deals to “increase materially”.
Single-asset secondaries are seen as a “crown jewel strategy”, helping general partners keep the upside in their best assets rather than having to sell them on, Dawn said.
“It’s inevitable that many of the best assets that have historically transacted through that [sponsor-to-sponsor] channel will be transacted through the secondary market going forward,” he added.
While the volume of single-asset deals went up in the first half, the proportion they represent versus multi-asset deals is down on full-year 2020 at 41 percent. This is still 20 percentage points higher than at the end of 2019.
Ten percent of respondents planning to raise capital in the next 12 months said they were raising a fund dedicated to single-asset deals. This does not include separate accounts dedicated to specific single-asset deals, which growing numbers of buyers are raising alongside their flagship funds, Dawn said.
Evercore recorded $48 billion of secondaries transaction volume in the first half, up 163 percent on the first half of 2020 and $12 billion shy of the total for full-year 2020. GP-led transactions accounted for 60 percent of the market in the first half, a full 10 percentage points higher than in full-year 2020.