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Tech direct secondaries hit $2.8bn last year

The tech sector drew the most direct secondaries last year, according to advisory firm NYPPEX. It expects nearly $20bn in direct secondaries to transact across sectors this year.

The technology industry accounted for 24 percent of $12.4 billion of direct secondaries transactions globally in 2013,  according to a report by New York advisory firm NYPPEX .

In a private market report the secondaries advisory firm said it had seen a rise on the previous year’s volume for secondaries directs jump by a quarter from $8.2 billion in 2012 to $12.4 billion last year.

After tech, the second most popular industry the firm found was energy and natural resources with 18 percent, and consumer non-cyclical directs with 15 percent.

NYPPEX said it estimated the secondaries directs market to be worth $19.4 billion this year.

NYPPEX chief executive officer Laurence Allen said U.S. and European private tech companies had experienced approximately 47 percent and 32 percent increases in valuations respectively this year.

“Increasingly, venture firms decided it was a good time to monetize this unrealized appreciation and create cash distributions for limited partners through secondaries sales,” said Allen.

Secondaries transaction volume in venture-backed tech could double this year, according to NYPPEX estimations.

Allen said: “Further, that estimate does not include potential secondaries transaction volume from Chinese private companies in the information technology sector, which we believe is poised to grow significantly in 2014.”