ROWAYTON, Conn., Sept. 15, 2022 (GLOBE NEWSWIRE) — A new survey from Stifel Financial Corp. (NYSE: SF) and Eaton Partners, a Stifel company, is seeing strong appetite for GP-led secondary recap trades Investors are increasing 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 will increase their investment dollar allocation to GP-led secondary recap trades by the end of 2022.
- 42% of investors now invest at least half of their invested capital in ongoing funds in GP-led transactions.
- Investors ranked technology, healthcare, services and industrials as their current top industries. Life Sciences and Energy was the worst ranked, essentially unchanged from the last survey in May 2022.
- Opportunities span the globe, with respondents citing the United States, Europe and Asia as the most interesting, reflecting sentiment from the May survey.
- More than half (55%) say they actually invested more than $100 million in the first half of 2022, and 11% invested more than $500 million during the same period. That compares to just 36% of investors who anticipated investing more than $100 million in GP-led secondaries in the first half of this year, and just 7% planning to do so during that period to invest more than 500 million US dollars.
- Respondents were evenly split between GP-led single-asset and multi-asset secondary recap opportunities in H1 2022, but strongly (68%) preferred GP-led multi-asset secondary recap opportunities for H2 th half of 2022.
- Investor sentiment on a dedicated versus general capital pool for GP-led secondary recap trades remained virtually the same, with around a quarter using a dedicated pool in H2 (24%) vs H1 (26%). .
- Once again, investors identified aggressive NAVs, mediocre investment opportunities and unknown GPs as key issues in underwriting GP-led secondary recap deals. In fact, over 90% of respondents believe it will be a quarter or two before NAV brands adequately capture the downturn in public stocks and comparable transaction values. Additionally, in the second half of 2022, investors identified inflation/recession resilience as another top factor. LP support and industry headwinds were of least concern in both 1H and 2H, and the stabilized post-Covid run rate was also identified as an issue of minor concern for investors in 2H 2022.
- For LP portfolio deals, 35% of respondents invest a majority of their fund capital in LP portfolio deals, with nearly 65% targeting smaller lots of $100 million or less. Notably, about a third (32%) plan to increase the use of investment capital for LP portfolio transactions in 2022 compared to 2021, indicating the expectation of a potentially balanced buyer/seller market in the second half of 2022.
“The results of our most recent Advisory survey show that investors continue to prioritize GP-led secondary recap transactions with increasing priority 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 investment dollars for these types of transactions, which offer GP’s portfolio management tools and limited partners liquidity options, which is required in the current macroeconomic environment Cycle for private capital markets.”
Eaton Partners, which provides leading fundraising, advisory and capital solutions as part of Stifel’s investment banking team, offers investment managers direct access to Stifel’s broader banking services, including over 600 professionals in 24 offices. With extensive experience in the secondary market, Stifel and Eaton have collectively advised on and executed secondary transactions valued at more than $2.5 billion over the past three years.
Click here to view the full survey results.
The online survey of 64 top 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 equity brokerage and fund advisory firms, having raised more than $130 billion across more than 175 highly differentiated alternative investment funds and offerings. Founded in 1983, Eaton advises and raises institutional capital for investment managers across alternative strategies – private equity, private credit, real assets, real estate and hedge fund/public market – in both the primary and secondary markets. Eaton Partners has offices and operations throughout North America, Europe and Asia.
Eaton Partners is a division of Stifel, Nicolaus & Company, Incorporated, a member of SIPC and NYSE. Eaton Partners subsidiary, Eaton Partners (UK) LLP, is authorized and regulated by the Financial Conduct Authority (FCA). Eaton Partners’ subsidiary, Stifel Hong Kong Limited, doing business as Eaton Partners Hong Kong, is authorized by the Hong Kong Securities and Futures Commission (SFC) as a Type 1 Licensed Company. 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/.
stalk company information
Stifel Financial Corp. (NYSE: SF) is a financial services holding company headquartered in St. Louis, Missouri that conducts its banking, securities and financial services businesses through several wholly owned subsidiaries. Stifel’s broker-dealer clients are served in the United States by Stifel, Nicolaus & Company, Incorporated, including its Eaton Partners division; Keefe, Bruyette & Woods, Inc.; Miller Buckfire & Co., LLC; and Stifel Independent Advisors, LLC. The company’s broker-dealer subsidiaries provide securities brokerage, investment banking, trading, investment advisory and related financial services to individual investors, wealth professionals, corporations and municipalities. Stifel Bank and Stifel Bank & Trust offer a full range of consumer and business credit 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.
Neil Shapiro, (212) 271-3447
Jeff Price, (212) 271-3749