New Stifel & Eaton Partners survey finds investors are increasing investment dollar allocations to GP-led secondary deals

Eaton Partners

ROWAYTON, Conn., Sept. 15, 2022 (GLOBE NEWSWIRE) — A new investigation by Stifel Financial Corp. (NYSE: SF) and Eaton Partners, a Stifel company, reveals a strong appetite for GP-led secondary wrap-up deals as investors increase their dollar allocations in the third and fourth quarters.

The latest Stifel/Eaton Partners GP Advisory Survey asked 64 global investors about their approach to investing in GP-led secondary deals. Key findings include:

  • 62% of investors increase their investment dollar allocation to GP-led secondary wrap-up trades by the end of 2022.

  • 42% of investors now allocate at least half of their invested capital in current funds to GP-led deals.

  • Investors ranked technology, healthcare, services and industrials as their current top industries. Life sciences and energy rank lowest, essentially unchanged from the last survey in May 2022.

  • The opportunities stretch across the globe, with respondents indicating the US, Europe and Asia as the most interesting, replicating the sentiment of the May survey.

  • More than half (55%) report having actually invested more than $100 million in the first half of 2022, and 11% have invested more than $500 million during the same period. This compares to just 36% of investors who expected to invest more than $100 million to work in GP-led secondary facilities in the first half of this year, and just 7% who planned to invest more than $500 million during this period.

  • Respondents were evenly split between single-asset and multi-asset GP-led secondary recap opportunities in 1H 2022, but strongly favored (68%) multi-asset GP-led secondary recap opportunities for 2H 2022.

  • In terms of a dedicated pool of capital versus a general pool for GP-led secondary wrap trades, investor sentiment remained virtually the same, with around a quarter using a dedicated pool in 2H (24%) against 1H (26%).

  • Once again, investors identified aggressive NAVs, poor investment opportunities and unknown GPs as the top issues when underwriting GP-led secondary recap trades. In fact, more than 90% of respondents believe it will take another quarter or two for net asset values ​​to adequately capture the decline in public stocks and comparable trades. Additionally, in the second half of 2022, investors identified inflation/recession resilience as another major driver. LP support and industry headwinds were of least concern in 1H and 2H, and post-Covid stabilized execution rate was also identified as an issue of low concern for investors in 2H 2022.

  • When it comes to LP portfolio deals, 35% of respondents invest the majority of their fund’s capital in LP portfolio deals, with nearly 65% ​​targeting smaller sizes of $100 million or less. Of note, around a third (32%) plan to increase their investment capital deployment in LP portfolio transactions in 2022 compared to 2021, suggesting a potential balanced bid/ask market in the future. 2H 2022.

“The results of our latest advice survey show that investors continue to increasingly prioritize GP-led secondary wrap-up trades this year,” said Peter Martenson, managing director of GP Advisory, Secondaries and Directs. at Eaton Partners. “When comparing the results of our previous survey, it is clear that investors remain focused and intend to accelerate the allocation of the investment dollar to those types of transactions that provide portfolio management tools. to generalists and provide liquidity options to limited partners, which is necessary during the current macroeconomic cycle for private capital markets.

Eaton Partners, which provides industry-leading fundraising, advisory and capital solutions capabilities within Stifel’s investment banking team, offers investment managers direct access to banking services more wide Stifel, including more than 600 professionals across 24 offices. With deep secondary market experience, Stifel and Eaton have advised and executed over $2.5 billion in secondary transactions in the past three years alone.

Click here to see the full survey results.

The online survey of the top 64 institutional investors was conducted from August 30, 2022 to September 9, 2022.

About Eaton Partners
Eaton Partners, a Stifel company, is one of the world’s largest investment dealers and fund advisory firms, having raised more than $130 billion for more than 175 highly differentiated funds and alternative investment offerings. Founded in 1983, Eaton advises and raises institutional capital for investment managers in alternative strategies – private equity, private credit, real estate assets, real estate and hedge funds/public market – in the primary and secondary markets. Eaton Partners has offices and operates throughout North America, Europe and Asia.

Eaton Partners is a division of Stifel, Nicolaus & Company, Incorporated, Member SIPC and NYSE. Eaton Partners (UK) LLP, a subsidiary of Eaton Partners, is authorized and regulated by the Financial Conduct Authority (FCA). Eaton Partners’ subsidiary, Stifel Hong Kong Limited, trading as Eaton Partners Hong Kong, is approved as a Type 1 Approved Company by the Hong Kong Securities and Futures Commission (SFC). Eaton Partners and the Eaton Partners logo are trademarks of Eaton Partners, LLC, a limited liability company. ® Eaton Partners, 2022. For more information, visit https://eaton-partners.com/.

Stifel Company Information
Stifel Financial Corp. (NYSE: SF) is a financial services holding company headquartered in St. Louis, Missouri, which conducts its banking, securities and financial services businesses through several wholly owned subsidiaries. Stifel’s brokerage clients are served in the United States through Stifel, Nicolaus & Company, Incorporated, including its trading division Eaton Partners; Keefe, Bruyette & Woods, Inc.; Miller Buckfire & Co., LLC; and Stifel Independent Advisors, LLC. The Company’s affiliate brokers provide securities brokerage, investment banking, trading, investment advisory and related financial services to individual investors, professional fund managers, corporations and municipalities. Stifel Bank and Stifel Bank & Trust offer a full range of personal and corporate lending solutions. Stifel Trust Company, NA and Stifel Trust Company Delaware, NA provide trust and related services. To learn more about Stifel, please visit the company’s website at www.stifel.com. For global disclosures, please visit https://www.stifel.com/investor-relations/press-releases.

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James V. Hayes