CVC, Apax and TPG buyout funds were the most desired secondaries in 2014, according to Cebile Capital, a firm that advises buyers and sellers of private equity secondary stakes.
The results are from Cebile’s List of Most Demanded Secondaries 2014, which assesses the secondaries market demand of US and European buyout funds.
Cebile use two measures to compile the list – The Cebile Liquidity Rating and the Cebile Demand Gauge – which seek to measure how easily a firm’s funds would trade on the secondary market, based on the interest level and demand from secondaries buyers. Cebile rates the demand in the secondaries market for fund managers as “high“, “medium“ or “low.“ Secondary buyers include dedicated secondaries funds, fund of funds and institutional investors.
The most demanded US private equity managers included Bain Capital, Apollo, Carlyle, New Mountain and Water Street. In Europe the most sought after private equity firms were Permira, PAI, Altor and BC European Partners.
Reflecting improved appetite for secondaries investment, 75% of the funds in the top 30 list achieved a demand rating of ‘high’. Some 37% of the private equity managers on the list were headquartered in Europe while the rest were based in the US.
Total secondaries transaction values rose to a record high in 2014, reaching approximately USD40 billion worldwide in 20141, while the total raised for secondaries funds grew to approximately USD60 billion.
Sunaina Sinha, managing partner of Cebile Capital, says: “the market for investment in global secondaries funds improved substantially in 2014, reflecting a growing level of comfort amongst investors, and the market will continue to develop as investors and fund managers become more sophisticated in their approach. As an adviser to buyers and sellers of secondaries interests, we use the list as a proxy for market trends, and are greatly encouraged by last year’s demand.”
