Jasmin Capital announces today the publication of its Annual Private Secondary Market Survey
presenting data, trends, and an outlook of both LP-led and GP-led transactions.
“Our survey has been conducted among our wide network of private market professionals,
gathering more than 100 respondents cumulating over 1 trillion dollars of AuM” Gilles Morel – Head
of Secondaries at Jasmin Capital – states.
In the current market environment, driven by capital constraints and lower DPI1 due to the
slowdown in the M&A market, Gilles Morel underlines that “almost 90% of LPs have declared a
similar or higher likelihood of turning to the secondary market in 2023”. In addition, LPs are
mentioning active portfolio management (i.e. mitigation of the denominator effect, rebalancing
of the portfolio, and asset rotation) and vehicle wind-down (including tail-end sales) as the two
main reasons to turn to the secondary market.
“Small and Mid-cap Buyout fund stakes are the ones under the spotlight in the secondary market,
as 80% of our respondents have declared an ‘interest’ or a ‘strong interest’ in carrying out such
transaction” Gilles adds, this trend translates into converging pricings to Large cap levels for the
Mid segment, and at a lesser extent for the Small market. While Buyout fund stakes remain most
preferred, VC suffers from market dislocation and uncertainties on their valuation, Infrastructure
and Private Debt offer some resilience despite asset repricing due to the new rate environment.
Furthermore, Gilles Morel observes an emerging trend where “Bid/Ask Spread has been narrowing
thanks to increasingly flexible sale process and new market practices such as mosaic
transactions or cherry picking in large portfolios”.
Secondary market represents a key alternative for GPs to M&A. GPs favor continuation funds but
their interest in preferred equity, NAV financing and strip sales2 continues to grow. Selective
Stapled transactions, which combines a secondary transaction with the commitment in the
fundraising of the GP’s upcoming fund, are sought due to current adverse fundraising conditions.
“High quality assets and GPs are key to successfully execute a GP-led deal. Secondary buyers
pay strong attention to the valuation as well as misalignment of interests and conflicts of interests”
pursues Gilles Morel.
On the back of this 2023 edition survey, he concludes that “Jasmin Capital forecasts a transaction
volume between 120 and 140 billion dollars over 2023”.