What it Takes to Win a Secondaries Deal

World-wide, Asset Management companies can boast of $120 trillion AUM. These numbers are staggering, and even with such a large base, they are growing. Within Asset Management, the Secondaries market is of particular interest, not only because of its growth rate, but also because of its enormous potential.

As with all boom areas, competition is fierce and skilled personnel are hard to find. As volume increases, so too does complexity, and as the sector gets more attention, from investors and the press alike, regulation and governance play a large role in outcomes.

In this web of factors lies great opportunity. Secondaries deals can be lucrative and wealth-creating. The key is to understand the industry and to have a deep sense of what it takes to win a Secondaries deal.

At Pepper, we have built a cloud-native data platform for Secondaries.  Technology like ours is an enabler and when coupled with human experience, wisdom, and deep industry context, it’s a winner.

Three Keys to Winning Secondaries Deals:

1. Long-term relationships with deal sources. As a matter of course, it is great to be able to get early intimation of deals and also to be able to assess the manager’s ability to execute on the deal. While it might appear to be a “transactional” industry on the surface, it is in reality relationship-driven.
2. Extensive market intelligence. Answers to fundamental questions like “Who is selling?”, “Why are they selling?”, and “What are the key sales drivers?”, are the precipitate of vast amounts of data-gathering, hundreds of calls and interactions, and the ability to aggregate all that data in a platform, contextualize it, and use it for decision-making.
3. Smart-Pricing. Secondaries managers often see the same funds via multiple sellers. Understanding the pulse of the deal and ensuring the pricing regime is consistent with your goals is key.

There are of course many factors involved in prospecting, analyzing, and securing Secondaries deals but this is a good start.

Pepper wants to be part of your journey and help with your success.

Contact us as you build out your Secondaries practice and look to grow.