European secondaries up 50% year-on-year – report

Greg Gille
16 August 2018

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Secondaries activity in western Europe was buoyant in the first half of 2018, with an estimated $11.4bn's worth of transactions, according to the latest Setter Volume Report.

The report by secondaries adviser Setter Capital surveyed 125 active and regular buyers on the secondaries market, which reported total secondary market volume worldwide of $36.7bn in the first half of 2018 – a 26.2% increase on the estimate published in H1 2017. This is also well on the way to exceeding the $60.7bn reported for the full 2017 year.

Western European funds and direct secondaries saw the largest increase in H1 compared with other geographies: the area was home to an estimated $11.4bn's worth of transactions, equating to a 49% increase on the same period last year. Again, should activity continue at this pace, Europe could comfortably exceed the $17bn reported in 2017 by year-end.

Activity in the US increased 23% year-on-year (accounting for more than half of total worldwide volume), while volume for Asia-Pacific assets was down by more than a quarter compared with H1 2017.

The report also mentions that direct secondaries (including GP restructurings and purchases of single minority stakes and co-investments) worldwide were up sharply in H1, increasing from $7.69bn to $13.64bn.

The 125 secondary buyers surveyed by Setter include 69 secondary funds, 41 funds-of-funds, 10 hedge funds, four investment consultants and one pension fund. Setter noted that the overall deal volume figure is conservative, as it does not include the activity of more than 1,000 opportunistic and non-traditional buyers – the activities of all sovereign funds (including ADIA, ADIC, GIC, Temasek, etc) are notably excluded.

The full report can be accessed here.