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In this extract from The Secondaries Market, Brian Mooney and Jeremy Joersz of Greenhill Cogent examine the changes in the sector over the last 20 years, and look at the types of market participants.
Amid the emergence of managers specialising in GP-led deals, advisors are still vital in a complex sector with inherent conflicts of interest, according to Yaron Zafir, head of secondaries at London-based advisory firm Rede Partners.
While secondaries deals are at their core simply trades, buyers have become more specialised, and advisors too have become more selective about the areas they compete in, according to Sixpoint Partners' Shawn Schestag.
Recent SEC focus on fund restructuring has put pressure on GPs to make sure their limited partners get fair treatment during the process. Molly Diggins, general counsel for advisory firm Monument, who says LPs should make themselves heard and ask for greater transparency.
Adam Howarth, co-head of private equity secondaries at Partners Group, explains how heightened anxiety in the market is impacting activity at the firm and why secondaries returns will become increasingly mixed.
Some GP-led deals fail due to a lack of trust, and GPs should be completely transparent about any benefits they receive, according to law firm Proskauer Rose’s Howard Beber and Michael Suppappola.
The private equity industry and insurance firms in particular can benefit from securitisation, according to Park Hill's Larry Thuet and Pablo Caló.
A model is emerging in the GP-led solutions market that can eliminate conflicts of interest, writes Evoco partner and co-founder Michel Galeazzi.
Sellers coming to market with deals less than $50m in size face challenges on both price discovery and execution, according to Kline Hill Partners' Mike Bego.
The secondaries market in Africa may become larger relative to the primary market than in North America or Europe, according to Credit Suisse.