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Travers Smith

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At our recent Alternative Insights Summit, Victoria Bramall, part of Travers Smith's secondaries team, led an insightful discussion on GP-led continuation vehicles. She was joined by Johanna Lottmann of PJT Partners and Kate Simpson of CVC Secondary Partners (formerly Glendower Capital) who shared insights from their wealth of experience in secondary private markets.   The panel explored the recent trends in the CV market - they covered the latest on how these transactions are priced, the typical market position in relation to the wider deal economics, the extent of due diligence together with the particular areas of focus and the use of NAV facilities. Other key topics discussed included LP management and asset selection – we have shared the key takeaways in relation to the latter here.   In the context of a CV being considered, the session explored the hallmarks of an asset which is likely to be successful and how you construct a good ''story'' for potential secondary investors concluding that these three elements are crucial:   Asset quality – strongly performing companies – ideally operating in very resilient, non-cyclical markets – with strong management teams, a good relationship between the GP and management together with conservative leverage with no near term refinancing risk and with a clear path to exit.   Rationale – the ideal case being, there is strong demand for the asset but the GP doesn't want to sell – they have a fantastic relationship with the management team and know exactly what they need to do if they just had more time and more money. Alignment – typically created by a healthy GP commitment providing incoming LPs with the best insurance policy – if the CV doesn't perform well, it is going to hurt the GP too.   Thank you again to our fantastic panellists.   #AssetManagement #Secondaries #Markets

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Matthew Kichenside

Leading Private Equity Management Adviser

1mo

Great stuff Victoria Bramall

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