Will Deal Activity Force Secondary Sales?
We’ve discussed secondaries quite a bit this year, including how the massive increases in supply and demand have not been matched by transaction volume. The most common explanation has been a wide chasm in bid/ask prices, with buyers and sellers each blaming each other for being too greedy/stingy. Is this stalemate permanent? Not according to John Begg, a managing director with HarbourVest Partner. During a panel discussion in Quebec City, he said that for all the talk of seller liquidity troubles, the squeeze was loosened because general partners weren’t making many capital calls (particularly big GPs like mega-buyout funds). Now that deal volume is slowly beginning to pick up, Begg said he expects LPs to begin feeling more pressure to sell.
