The volume of alternative investment secondary market deals in the first half of this year surpassed the first half of 2021 despite a drop in the number of transactions, according to reports released July 29 by secondary market brokers Setter Capital and Jefferies Financial Group.
Setter reported secondary market volume of $57.8 billion in the first half of 2022, up 5.3% from $54.9 billion worth of transactions in the six months ended June 30, 2021. Secondary market buyers surveyed by Setter expect that net asset value of secondary market assets being sold will drop by 3.5% in the second half of 2022, a less optimistic estimate than at the end of the fiscal year 2021, when buyers expected prices to increase by 4.2%.
Jefferies' private capital advisory business pegged global secondary volume at $57 billion as of June 30, 19% more than the prior first half record of $48 billion on June 30, 2021. Jefferies predicts that there will be a total of $120 billion in secondary market transactions in all of 2022. The average high bid was 86% of net asset value, Jefferies reported. Most of the volume was made up of sales of limited partnership interests, which accounted for $33 billion of the secondary market volume in the second half. General partner-led transactions accounted for 42% or $24 billion. Roughly 48% of the total GP-led transactions were of single-asset continuation fund transactions, mostly portfolio companies from buyout funds, Jefferies said.