“Secondaries Investor: Sophistication and specialisation in secondaries” by Shawn Schestag
Please click here to read Shawn Schestag’s guest column on Secondaries Investor’s website: Secondaries Investor
While secondaries deals are at their core simply trades, buyers have become more specialised, and advisors too have become more selective about the areas they compete in, according to Shawn Schestag, managing director at New York headquartered advisory firm Sixpoint Partners.
Over the past five years the secondaries market has quadrupled in size, from $10 billion to nearly $40 billion in annual transactions; growth so staggering that the dynamics, participants and methods of conducting business were forced to evolve to keep pace.
While the basic building blocks of transactions, like LP portfolio sales, still underpin the secondaries market, the dramatic increase in capital has driven the proliferation of transaction types. As a result, secondaries investors and advisors have broadened their approach to encompass all manner of LP or GP “liquidity solutions,” rather than just standard transactions.
As we’ve seen in many other financial sectors, there is an increased emphasis on specialisation as a market grows. In Secondaries, buyers are focusing on more specific strategies and advisors are being increasingly selective about the arenas in which they compete.
Buyers used to focus on buyout and venture capital opportunities, but they have acquired a more sophisticated palate. Their focus has broadened to include special situations, energy, commercial real estate, natural resources, real assets and infrastructure and credit.
Sixpoint Partners, LLC, is a registered broker/dealer, member FINRA (http://www.finra.org) and SIPC (http://www.sipc.org).