Investment bank Greenhill & Co has become a major player in the secondaries market with the $97.6 million acquisition of Cogent Partners, one of the industry’s largest and oldest secondaries advisors.
Since its founding in 2002, Cogent has advised on transactions involving thousands of limited partner interests, including 55 deals valued at $11 billion in 2014 alone. The combined firm’s secondary advisory work will operate under the name Greenhill Cogent.
The deal is the latest change to the market’s shifting advisory landscape. Late last year, rival advisor Park Hill Group was merged with PJT Partners, while groups like Evercore have been building up their secondaries advisory capabilities. Eight of Cogent’s current managing directors and 30 other investment professionals will join Greenhill, which previously did not have a secondaries advisory business.
“The acquisition of Cogent is an opportunity to become a market leader in a distinct and important segment of advice that we believe has significant growth potential,” chairman Robert Greenhill said in a statement.
Over the years Cogent has had internal discussions about its business and whether it should operate independently, Cogent managing director Stephen Sloan told PEI's sister title Secondaries Investor. “Greenhill was the only partner that had the right cultural fit, a pure focus on advisory and no conflicts from principal businesses. It was a relationship we developed over many years.” “Their bigger platform will help complement the work we do,” Cogent managing director Brenlen Jinkens added.
The Cogent team is expected to benefit from Greenhill’s relationships with institutional investors, particularly in the real estate sector, the statement disclosed. “We believe there are significant opportunities to leverage our business with Greenhill’s highly successful real estate-focused capital raising business,” Sloan said.
Cogent is led by managing directors Chris Bonfield, Bernhard Engelien, Todd Miller, Brian Mooney, Bill Murphy, Dominik Woessner, Jinkens and Sloan all of whom will join Greenhill. Upon closing of the transaction at the end of the first quarter roughly 30 percent of the total price is payable to Cogent in the future, as long as agreed revenue targets are met. Cogent’s revenues last year were roughly $45.8 billion, according to the statement.
Cogent’s executives will receive 72.7 percent of their consideration in Greenhill stock and the remainder in cash. The firm will retain its Dallas headquarters and its Singapore office but will consolidate office space with Greenhill in London, New York and San Francisco.