Secondary market likely to be aided by GP-led deals
Big increase in deals seen as industry adjusts after COVID-19 disruptions
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Jill Shaw said the secondary market gives limited partners a chance to leave longtime funds or investors a way to part with managers that don’t fit in their portfolio anymore.
Alternative investment general partner-led secondary market transactions are expected to increase in 2021, giving managers additional exit options and relieving the pressure of selling companies during the COVID-19 pandemic.
GP-led transactions involving single assets or portfolios are not just for troubled funds. Alternative investment managers with some of the most sought-after assets in sectors such as health care and software are recapitalizing on the secondary markets to give them more time and capital to accelerate growth of the portfolio companies in the funds, industry experts say.