Evercore has usurped Greenhill to claim the top advisor position by deal value for the first time as the market shifted towards more GP-led processes last year.
The New York-headquartered investment bank’s private capital advisory unit worked on $18.4 billion-worth of deals that closed last year, a 40 percent jump on its 2018 figure, according to the Secondaries Investor Advisory Survey 2020 published by sister publication Secondaries Investor in April.
“We had a very balanced business year between GP-led and LP [deals], and it was a very big year, particularly for our GP-driven business,” said Nigel Dawn, global head of private capital advisory at Evercore. The firm had its best year in Europe where it won [sister publication] Private Equity International‘s GP and LP deal of the year, he added.
The firm’s 53 deals were split roughly 50/50 between GP-led transactions and LP fund stake sales.
Deal volume in the survey was defined as purchase price plus unfunded commitments for transactions that closed between January and December, and data was submitted by advisors. NAV from rolling LPs was not included in deal totals.
Greenhill, which has topped the list every year since 2015 when the survey began, advised on $17 billion worth of transactions. It worked on the highest number of transactions at 70, including its landmark process with Japan’s Norinchukin Bank – the largest-ever secondaries sale.
Buyout funds accounted for almost 60 percent of Greenhill’s deals, followed by venture at 9 percent, infrastructure and energy at 9 percent, funds of funds and secondaries at 8 percent, real estate at 7 percent, private credit at 7 percent and co-investments at 1 percent.
GP-led processes grew to account for sizable portions of advisors’ work last year, the survey shows. Evercore, Lazard, PJT Park Hill and Campbell Lutyens had between 56 percent and 74 percent of their transactions focused on GP-leds, while all of Credit Suisse’s, Rede Partners‘ and Flow Advisors’ deals were GP-leds.
“[There was] ever-increasing innovation in the GP-led space leading to a broadening spectrum of deal types across both direct funds and fund of funds, and greater diversification across asset classes with meaningful contributions from private equity, infrastructure and private credit,” Campbell Lutyens noted, commenting on last year’s market. The London-headquartered firm advised on $12.5 billion across 21 transactions – a 50 percent increase by value on the previous year.
Campbell Lutyens advised on five single-asset restructurings, two strip sales and two deals involving preferred equity. By asset class, private equity accounted for more than two-thirds of the firm’s deals, followed by infrastructure at 26 percent and private credit at 6 percent.
PJT Park Hill had a 20 percent year-on-year increase in deal volume to $14.5 billion. The firm’s 27 transactions included three single-asset restructurings, one strip sale and one tender offer.
Buyouts accounted for around two-thirds of PJT Park Hill’s work, followed by venture and growth at 22 percent and credit, real assets and other at 13 percent.
Lazard had a noticeable uptick in deals, having roughly doubled its transaction volume over the last two years. The firm advised on at least $10 billion across more than 20 transactions last year, compared with around €5 billion worth of deals in 2017. It did not participate in the 2018 survey.
The firm advised on three single-asset restructurings, one strip sale and one GP interest stake sale.
Credit Suisse‘s private fund group advised on $7 billion-worth of transactions across 10 deals and was the most active advisor of single-asset transactions with seven. It also advised on one strip sale, two preferred equity deals and one GP stake sale.
Private equity accounted for the bulk of Credit Suisse’s deals at 70 percent, with the remainder being infrastructure.
London’s Elm Capital advised on $1.35 billion of deals across 18 transactions. It had roughly an 80/20 split between LP and GP-led deals which were all private equity-focused, and closed two strip sales and three transactions involving preferred equity.
Commenting on last year’s market, Elm noted:
- Most LPs are now interested in doing preferred equity deals
- Most GPs are now open to look at restructuring existing funds
- Staple ratios on secondaries deals combined with primary commitments have increased
- New entrants are looking at non-traditional deals such as preferred equity, single assets and small transactions
Boston-headquartered Mozaic Capital Advisors worked on $1.2 billion across 10 transactions. Traditional LP sales accounted for 95 percent of its work last year.
Duff & Phelps advised on $1.1 billion-worth of deals with a 70/30 split in favor of LP transactions. The number of deals the firm advised on that faced publicly-traded partnership restriction issues was surprising, the firm noted, adding that a portion of one of its deals was pushed back to 2021.
The firm also said it noticed a number of boutique participants setting up buy-side operations to acquire GP-led deals.
Rede Partners worked on €867 million of volume last year across five deals, including one single-asset transaction. Its asset class split was 44 percent buyout, 14 percent growth, 14 percent debt, 14 percent venture and 14 percent infrastructure.
Zug-headquartered AXON Partners worked on $453 million across five deals. It noted a slowdown in the second half of last year, as well as a slight drop in pricing across all strategies “despite the significant dry powder in the market.”
Flow Advisors, the firm founded by former Evercore European private capital advisory head Nicolas Lanel, advised on one deal worth $350 million last year.
“GP-led solutions have now become mainstream and among these, single-asset secondaries are now routinely evaluated by GPs as alternative exit paths for successful investments, next to M&A and IPOs,” Lanel noted.
Advisors were asked in February to provide details of the previous calendar year’s activity.
Firms including Cebile Capital, Citi, Houlihan Lokey, Mercury Capital Advisors, M2O, Sixpoint Partners, Triago and UBS either declined to participate in the survey or did not return requests for comment.