The Secondaries Report

Private secondaries have been on a growth trend for quite some time, but over the past two years in particular, investors have witnessed the incredible growth and maturation of the secondaries market. In part, this can be credited to the strength of the GP-led market – which Evercore says grew to $68 billion in volume in 2021, more than doubling the $32 billion of volume in 2020 – that is opening new doors to liquidity and value creation as private markets fundraises become ever larger and more frequent. Even in the face of significant macroeconomic challenges, the general sentiment across the market is that private secondaries are likely to continue on a path of meteoric growth.

Even as the pandemic was setting in, the market made it clear to us as we prepared the 2020 iteration of the Buyouts Secondaries special report that the secondaries market was ready to take off.

In retrospect, those predictions couldn’t have been more spot on. Even in the face of a global pandemic, 2020 dealflow volumes were the third highest they’ve ever been since the inception of the secondaries market. With a significant amount of pent-up demand for diversified LP portfolios and no sign that the GP-led market is slowing down, 2021 could become a year for the record books.

The initial shock of the covid-19 pandemic is wearing off and markets are starting to adjust to the new reality. In the secondaries market, a brief pause to allow valuations to catch up with the new paradigm is expected to be followed by a flurry of activity as liquidity needs drive dealflow.

If the global financial crisis a decade ago taught us anything, it is that even in a steep downturn there is plenty of upside to be captured. Even with slow traditional secondaries dealflow, there’s still plenty of work to be done, and structured transactions offer opportunities for savvy investors to stay in the game.