International investment bank Houlihan Lokey is starting a secondaries advisory practice, which will be led by two former senior Bear Stearns managing directors, to capitalize on the increasing activity in the secondaries market.
Jeff Hammer and Paul Sanabria, who had previously built both primary and secondaries private equity businesses at Bear Stearns, will head a New York-based team focused on the secondaries market for partnerships and other private investments. The team will identify and advise on potential deals for Houlihan’s clients. The bank also provides advisory services in areas such as mergers and acquisitions, financial restructuring and valuation.
“The time is right for Houlihan Lokey to be serving this market,” Sanabria said. “Investors are unsure of asset values, yet they need liquidity solutions now. We can offer compelling advice and transaction support which meets a critical market need.”
However, spokeswoman Michelle O’Brien says the new practice will differ from that of leading secondaries advisory and intermediary firms like Cogent and UBS because Houlihan will only offer advisory services. “Our financial advisory services does fairness opinions and valuation, so we’re doing a lot of valuing of illiquid securities and derivatives and things like that, as well as providing opinions on transactions,” she said.
Houlihan is the latest player to ramp up its operations in response to the surge in secondaries market volumes, especially as more cash-strapped limited partners are looking to sell down their holdings.
For instance, Greenpark Capital recently added to its secondaries buyout team, as it expects to see as much as $30 billion in closable deal flow in the industry this year. Coller Capital also recently said it expects to launch a sixth private equity secondaries fund this year to tap the rise in distressed sales.