The secondary market has ballooned in size since we first began publishing this report more than a decade ago, successfully navigating the ups and downs of numerous economic cycles. Along the way, buyers have innovated, growing more specialized and developing new deal structures, including most notably general partner-led deals, as well as preferred equity deals and net-asset-value-based loan structures.

To inform this year’s Guide to the Secondary Market Buyer Survey, WSJ Pro Private Equity conducted a wide-ranging survey of dozens of private-equity firms over four weeks in March and April 2022. 

The survey data helped inform much of the coverage in this year’s report, including the trends shaping both secondary deal making and fundraising. We also examine the talent squeeze in the secondary market, which has continued to attract new entrants as its assets have grown.

In this newsletter, we present highlights from the issue. Enjoy and download the entire report here. 

Laura Kreutzer, Editor, WSJ Pro Private Equity

In 2021, secondhand trades of private-equity assets reached the highest levels in the industry’s history, but 2022 is unfolding differently. Market volatility, rising inflation, geopolitical instability and fears of an economic slowdown are creating fresh headwinds for secondary-deal activity.

Many secondary buyers, however, remain optimistic about the prospects for robust deal activity in 2022 and more of them see market conditions tilting in their favor, according to the latest edition of WSJ Pro’s Guide to the Secondary Market Buyer Survey. Read More.

Nearly 81% of secondary investors responding to WSJ Pro’s Guide to the Secondary Market Buyer Survey said they had backed a single-asset deal this year, up from 56% of buyers who said they backed such deals in last year’s survey. More private-equity firms, including Clearlake Capital Group and TowerBrook Capital Partners, are turning to such deals to secure additional capital and time to hold onto prized investments rather than selling them outright.

The rapid growth in secondary deals is drawing the interest of private-equity firms and investment banks, which are acquiring advisory firms, poaching entire teams, partnering with established advisory firms, or building new teams. 

The pace of secondary fundraising got off to a slow start this year as firms face increased competition and a growing number of macroeconomic challenges, moderating the pace of expansion of secondhand asset sales from last year. This year is off to a much slower start, however, with just $3.55 billion raised by 12 funds through late May, compared with $21 billion across 13 funds at this time last year, Preqin data show.