Capital Allocators – Inside the Institutional Investment Industry Nigel Dawn - Secondaries in Private Markets (EP.378)
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Apr 8, 2024 Nigel Dawn, the global head of Private Capital Advisory at Evercore, shares his expertise on the booming secondaries market in private equity. He delves into the evolution of LP and GP relationships, discussing how perceptions have shifted since the financial crisis. Nigel offers insights on strategies for both buyers and sellers, the significance of unbiased advisory services, and the growth potential of secondary liquidity in private credit. He also reflects on the importance of communication skills and risk-taking in navigating this complex landscape.
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Dawn's early secondaries market experience
- Nigel Dawn's career started in commercial banking, then consulting, before UBS.
- At UBS, he pioneered selling a $2B portfolio of LP interests, leading to a structured transaction with HarborVest.
Secondaries Market Growth Drivers
- The secondary market grew from $6B to $20B, driven by LPs' need for liquidity and reduced stigma.
- The 2008 financial crisis further legitimized secondaries as a strategic portfolio management tool.
LP motivations for secondaries transactions
- LPs sell for strategic reasons such as rebalancing to core managers or pivoting asset classes.
- They might sell older funds to reinvest in newer ones for co-investment opportunities.