Top 5 deals of 2019

PAI Partners and Norinchukin Bank are among parties that feature in our list of eye-catching transactions of the year.

Transaction volumes point to another record year for the secondaries market, with $100 billion-plus a real possibility.

Advisor Greenhill put global secondaries transaction volumes at $42 billion in the first half of the year, a 56 percent increase on the first half of 2018. This was driven by $14 billion-worth of GP-led deals, double the volume registered in the first half of last year, with single asset deals and credit secondaries enjoying what could be a breakthrough year.

Many deals vied for the top spot, and Secondaries Investor has settled on five. Here they are:

The €2 billion restructuring of PAI Partners V

In April, Secondaries Investor reported that PAI Partners, one of Europe’s largest private equity firms, was to restructure its 2008-vintage Fund V. Working with Evercore, the firm gave limited partners the opportunity to sell to secondaries buyers or roll into a continuation vehicle containing two companies, including jewel in the crown Froneri, the world’s third-largest ice cream maker.

AlpInvest Partners, HarbourVest Partners and Goldman Sachs Asset Management all led on the €2 billion deal, committing €300 million each, alongside 45 other investors. Exiting investors received 7x on their stake in Froneri, Secondaries Investor understands.

Norinchukin Bank’s sale of a $5 billion portfolio

In March, regulation compelled Japanese cooperative Norinchukin Bank to sell $5 billion-worth of private market stakes, the largest ever LP stake sale. The bank worked with Greenhill to offload the portfolio, which contained around 100 fund stakes, 75 percent of which was unfunded, Secondaries Investor reported. Ardian underwrote the whole lot, suggesting the firm’s latest fund ASF VIII, which when closed will be one of the largest ever private equity funds, will have no trouble putting its $12 billion war chest to work.

Manulife’s $1.7 billion portfolio sale and spin-out

In August Manulife used the secondaries market to open itself up to third-party investors. Canada’s largest insurance company sold a $1.7 billion private equity portfolio off its balance sheet into a vehicle managed by the Manulife Private Capital team and backed by AlpInvest, which underwrote and syndicated the deal. The quality of the portfolio was noteworthy: 50 US mid-market private equity funds from managers such as Thoma Bravo, Apollo Global Management, Clayton, Dubilier & Rice and Audax. Campbell Lutyens advised on the deal.

Warburg Pincus’s $1 billion single-asset restructuring

In May, Secondaries Investor reported that Warburg Pincus was to carry out one of the largest ever single-asset restructurings. The New York-headquartered buyout firm, working with Lazard, lifted portfolio company Allied Universal out of its 2012-vintage fund and placed it into a $1 billion separate vehicle backed by a group of more than 20 investors led by AlpInvest.

While such deals tend to be reserved for funds near the end of their lives, Warburg only acquired the security services provider, one of the fund’s top-performing assets, in 2016.

Insight Partners’ $1.5 billion restructuring

In a deal first reported by sister publication Buyouts, tech investor Insight Partners took more than 30 companies from seven different funds and transferred them into a $1.5 billion continuation vehicle. HarbourVest Partners and Coller Capital led the deal, with Hamilton Lane and Partners Group among the other backers. Insight received $150 million in additional capital to help develop the portfolio.

The Lazard-advised was notable for its size, structural complexity and quality of the assets involved.