This should be an all-time record quarter for the secondary industry. I would estimate close to $10 billion of transactions are likely in the middle of being priced, negotiated, and in the transfer process right now. Regardless of source of deal volume (SecondaryLink, Preqin, etc), 2014 is set to top the charts for deal volume. Fourth quarter also tends to be the busiest of the year. As detailed more extensively in my pesecondaries.com blog a couple of months ago, many sellers are incentivized to clean up their assets by January 1.
That said, is this a good time to transact?
For sellers, most deals are going off March 31 or June 30 statements which could be helpful given weakness in the stock markets (whose value private assets correlate with) leading up to September 30 fund statements. Additionally, many worry that there are too many potential economic wobbles to derail the markets, valuations, and liquidity. Prices are high and hence this might be an opportune time for liquidity.
For buyers, the competition is up to its eyeballs in deals right in deals which could fragment attention on any particular deal. A brief, but busy annual meeting season has just kicked off to make everyone even busier. While combining motivated sellers and potentially over-busy buyers sounds compelling, as a buyer, I have to say most deals feel quite competitive. While the markets do seem high, timing them often backfires. Recent deals should provide secondary fund investors reasonable returns but only time will tell.
Read more at pesecdonaries.com.