Defaults with some upside

Even grey clouds have silver linings, it would seem. The pick-up in deal doing is already underway, with corporate financiers citing "more high-quality assets hitting desks" since the middle of May. GPs back this up, with many saying they expect to do a couple of deals by year end.

Of course this means they will have to make draw-downs - something many GPs have not dared do since the end of last year. This is where things could stall - a number of LPs currently on the edge may be pushed over if too many GPs ask for money around the same time.

While this initially indicates doom for any fledgling recovery, it may actually kickstart the secondaries wave that many have been anxiously awaiting. This is not only good news for specialist players, but also for the GPs, who get better funded investors to rely on (see feature page 14).

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