UBS launches secondary consulting business

With Nigel Dawn at the helm, the Swiss bank is moving into the private equity secondary advice industry.

Last year UBS beefed up its private equity placement team in the US. Now the firm is entering the secondary advisory business.

In August, the financial conglomerate announced the appointment of Nigel Dawn as head of its newly established Secondary Market Advisory Practice. The secondary team will be based in Stamford, Connecticut, which is also home to the firm's private equity fund placement operation.  

Dawn is already well known within the private equity secondary market for his work on a landmark deal – the $1.3 billion sale of UBS private equity fund interests to HarbourVest Partners.

That transaction, announced late last year, saw the transfer of more than 50 limited partnership interests that had been sitting underappreciated on UBS’ balance sheet.

This was no plain-vanilla sale. UBS and HarbourVest structured the deal so as to give both parties a share in future distributions. Now UBS wants to sell its experience to others.

The firm has recently stepped up its efforts in the US to provide private equity services and advice. A year ago, UBS brought Richard Allsopp over from London to join Jake Elmhirst to head up the placement group, also based in Stamford. At the same time the firm hired managing director Mark Schroeder away from CSFB’s dominant placement unit, as well as a number of other professionals from competing firms. UBS has roughly 25 professionals raising funds in the US and Europe.

In the secondary advisory business, UBS will not be without firmly entrenched competitors in the US, among them Cogent Partners, The Camelot Group and Probitas Partners in San Francisco.  

All of these groups are betting on a steady stream of secondary deals going forward. Unlike UBS, the sellers of secondary positions tend not to have the resources or expertise to navigate the many liquidity options available to them, especially as endowments, family offices and pension funds become more active participants in the market.

Interestingly, UBS’ combination of fundraising and secondary advice is part of a trend. Probitas, too, has both capabilities, as does Campbell Lutyens in London. People who talk to LPs all day are finding a demand for more that just new funds.