In an extract from a whitepaper aimed at LPs, Tradition's advisory team discusses the dynamic between bids, NAVs and public markets, and what it means for sellers.
Everyone loves a prediction; here are what key market participants think are likely to define the secondaries market in the coming year.
Secondaries buyers may find themselves on the hook for sellers’ liabilities. They should look to protect themselves, says Angus Marshall of CFC Underwriting.
The secondaries market offers significant opportunities, but in light of macro uncertainties, it is best to focus on being prepared rather than making predictions, says Pomona Capital’s Michael Granoff.
The subject of secondaries came up frequently at PEI’s Women in Private Markets Summit, held in the first week of December. Here are some of the issues that are top of mind.
The secondaries market is growing significantly, driven in part by GP-led deals. Yet this is only the start of its transformation, say Evercore’s Lea Lazaric Calvert, Jasmine Hunet Lamourille and Francesca Paveri.
The lack of broader acceptance from LPs is preventing buyers from fully tapping the single-asset market.
Buyers should beware of sponsors using the GP-led market to drive undeservedly favourable terms, said Pantheon secondaries co-head Rudy Scarpa.
At a time when concentrated deals are all the rage, small primary fund commitments can offer necessary diversification benefits.
Appetite for secondaries rises as more investors recognise it as way to increase exposure to real estate, according to James Jacobs, head of real estate for Lazard’s private capital advisory group.