As general partners (GPs) look to alternative liquidity solutions in the secondary market to monetize their investments, what are the key trends that drove a surge in GP-led transaction activity in the first half of 2024?
UBS surveyed secondary investors and analyzed transaction data to further explore these trends.
GP-led transaction volume
GP-led transaction volume
The GP-led secondary market exhibited continued strength in 1H 2024, achieving ~45% of UBS's projected GP-led volume for the full year.
UBS projects GP-led volume for the full-year to reach approximately $65 billion, driven by a more active 2H 2024.
Surge of activity
Surge of activity
- Macroeconomic headwinds and high interest rates continue to dampen private equity exit activity, driving GPs to utilize alternative liquidity solutions as a means of monetizing their investments and delivering DPI to underlying limited partners (LPs)
- Similar to years past, 2H 2024 deal volume is expected to outpace 1H 2024 volume as GPs seek to close recently-launched transactions before year-end
Notable pricing improvements
Notable pricing improvements
- Pricing improved across both single and multi-asset transactions in 1H 2024, with single asset transactions pricing in the mid-90s on average and multi-asset transactions in the high 80s
- UBS survey respondents observed several deals pricing at par or a premium, two themes that were less common in 2023
Emerging pools of capital
Emerging pools of capital
- Primary-oriented LPs are increasingly developing in-house capabilities to evaluate GP-led transactions
- Retail channels and other non-dedicated pools of capital are allocating to GP-led opportunities, with several secondary investors establishing '40 Act funds
- More multi-strategy asset managers have formed GP-led investment teams to focus on single asset deals where they can leverage their direct investment capabilities
Methodology: Reference to market analysis refers to a survey that UBS conducted to solicit feedback on secondary market activity in 1H 2024 as well as market intelligence that UBS has gathered from conversations with secondary investors, publicly available information and transaction activity that UBS was involved with in 1H 2024. Certain statistics shown reflect UBS’s estimates based on data gathered from UBS survey respondents and publicly available information.
1. Multi-asset transaction volume inclusive of tender offers and structured financings.
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