Who’s Active In Secondaries? Anyone BUT Secondary Firms
At least that’s what a new mid-year report from Cogent Partners observes. The secondary intermediary firm closed more than $2.5 billion worth of transactions in the first half of 2009, and less than 20% of those deals had a traditional secondary fund on the buyside. (See first chart below) That’s troubling news considering the sheer amount of money secondary funds raised last year. Thomson Reuters doesn’t track secondary fundraising but an unscientific survey revealed that just nine placement agencies raised a collective $24.1 billion in secondary funds in 2008, to give you a sense of the market. Meanwhile a chart peHUB published in April estimates that secondary firms raising new funds are targeting an additional $33 billion in commitments. Yet despite rampant enthusiasm for the deeply discounted secondary market earlier this year, the wave of activity has yet to take place. Traditional buyers have largely remained on the sidelines, thanks to sellers’ unwillingness to sell at such steep discounts.
