Last week in our special series on private equity secondaries, we discussed how GPs are leveraging newly developed liquidity in that market to manage funds and assist their LPs with their specialized investment needs. Given today’s challenged capital markets it’s also tougher to extract expected values from your best properties.
Sponsors are looking inwards and leaning into “know what you own,” our head of secondaries, Nick Lawler, tells us. They can raise incremental capital, continue investing in and owning a “trophy” asset, while not breaching concentration limits in a traditional fund structure (usually set at 15-25% of a fund’s total cost basis). Secondary trades enable the fund to not have an overly elongated hold.
A core element of CVs is optimal alignment of interests between the GP and their LPs. Active PE partners are required to roll 100% of their carried interest and GP commitment associated with the assets as their commitment going into the CV...
“I think they still have another hike in them at some point, just because there is still more momentum in underlying inflation than we expected at this point in the cycle.” – Kristin Forbes, professor of management and global economics, MIT Sloan School of Management.
Featuring Charts
Chart of the Week: Bonds Away
The popularity of secondary equity investments has risen markedly since 2016.
Read MoreChart of the Week: Who’s Leading What
The popularity of secondary equity investments has risen markedly since 2016.
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Chart of the Week: Primacy of Secondaries
The popularity of secondary equity investments has risen markedly since 2016.
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Chart of the Week: High Grade Problem
Investment grade bond issuers are paying more, but activity remains strong.
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Chart of the Week: Steady as She Grows
The Fed’s hawkish rate regime has tamed the higher pace of US economic growth.
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Chart of the Week: Indexed Returns
Almost two decades of data show strong junior capital returns relative to other credit.
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The Pulse of Private Equity – 9/25/2023
Another strong year for private debt Download PitchBook’s Report here. Private debt fundraising is off to a strong start, according to PitchBook’s just-released H1 2023 Global Private Debt Report. At halftime, almost $95 billion has been raised across 74 funds. That pace is ahead of last year’s, which makes us confident that fundraising will eclipse $200…
View ArticleLeveraged Loan Insight & Analysis – 9/25/2023
How does the US middle market characterize the quality of 3Q23 deal supply? Finding quality opportunities to put money to work has been one of the main challenges faced by middle market lenders this year. However, it seems that things could be improving on this front. When asked how they would characterize the quality of…
View ArticlePrivate Debt Intelligence – 9/25/2023
Q3 private debt fundraising in North America hits twelve month high Aggregate capital raised in North America has hit $34.8bn in Q3 year-to-date (YTD), the highest it has been since Q2 2022, which achieved a near record breaking $52.8bn. The number of funds closed during the third quarter so far remains average for the year…
View ArticlePDI Picks – 9/25/2023
Fundraising down, but hopes are up Private debt looks well placed to prosper, despite what has been a difficult period for investors. Three years ago, Private Debt Investor launched a cross-asset class survey called the Fund Leaders Survey comprised of more than 100 senior buyout, growth, private debt, venture capital, real estate and infrastructure executives….
View ArticleThe Pulse of Private Equity – 9/18/2023
Middle market deal activity Download PitchBook’s Report here. The middle market is humming along, according to PitchBook’s latest US PE Middle Market Report. Through June, about $214 billion has been invested across 1,635 deals. Both figures are slightly under last year’s pace but still ahead of the pre-COVID years. Middle market companies are being wooed by…
View ArticleMiddle Market Deal Terms at a Glance
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Beginning in July 2022 The Lead Left published a series of articles on credit market. This report consolidates those articles.
Cov-lite trends Inflation & rising interest rates – LIBOR to SOFR transition Mega-tranche uni trend ESG takes center stage Login to view interactive report and download PDF version. … Login to Read More...
Beginning in September 2021 The Lead Left published a series of articles on supply chain. This report consolidates those articles.
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