Gushing Liquidity

Since the first $1B deal in 2000 when Coller and Lexington bought assets off National Westminster, “secondary” volume has been on a steep climb – it exceeded $35B in 2013. With animal spirits high and many expectations of a bigger 2014, what are the events that could contain volume?

 – Would the decisions of a handful of pension funds be enough to cause a meaningful swing in total market volume?
 – Could a large stock market drop put some transactions on hold for quarterly-posted fund valuations catch up?
 – Might an adjustment of the Volcker rule pull some banks away from the table?
Many buyers would see a silver lining in a volume decline if it would bring with it relief from “nose bleed” pricing levels. However, if supply of PE interests got tighter for causes unrelated to views of underlying value, some acquirers might sharpen their pencils even further yet.
(First posted to “Secondary Link” January 29, 2013)