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The parties that bear the costs can vary according to the structure of the deal.
Access to trophy assets through transparent processes will underpin GP-led growth, say Evercore’s Alex Longden and Fred Stonell.
Transparency is key to managing conflicts and enabling alignment of interest.
Conditions are favourable for deal-by-deal transactions, adding to the growing ocean of manager types in an already competitive market.
Clear transaction rationale, defendable valuation positioning and a strong show of conviction from sponsors is helping buyers to get comfortable with continuation fund deals in a tough macro environment, says Matt Wesley at Jefferies.
An auction process is the most common means of price setting, but there are exceptions.
GP-led processes overtook traditional LP deals as a proportion of secondaries volume in 2020, and now account for around half of transaction volume.
Processes that don’t offer a status quo option have begun to crop up more frequently in the GP-led market.
As some GPs attempt to codify the removal of LPAC review and consent for continuation vehicles, they will face a ream of objections among investors.
Proactively tracking assets across global themes can provide an early edge in continuation fund opportunities, say Partners Group’s Anthony Shontz and Roy Baumann.