Listen to the discussion
The discussion was hosted by Real Deals editor Talya Misiri. Investec's Ian Wiese was joined by Graham Thomas, Managing Partner at Stage Capital; Raj Chall Principal of Secondaries Investments at Hamilton Lane; Petra Bukovec partner at Pantheon and Valerie Handal Managing Director at HarbourVest.
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Summary of the discussion:
- The panel was in agreement that the market had bounced back quickly in the second half of the year. This was particularly prevalent on the GP-led side.
- However, from an LP perspective, deal flow significantly slowed down in Q2. Given the uncertainties in the market, buyers have been more cautious and sellers have not started to adjust price expectations in response yet.
- A number of the panellists acknowledged the slowdown in deal flow during Q2. Instead, there was a focus on areas that led to recovery and growth. GPs were using this opportunity to learn about liquidity alternatives in the market.
- Market uncertainty has impacted the pricing of secondary funds. This has led to stand-offs between what the seller believes the price should be, compared to what the buyer predicts the price will be in a post-pandemic world. Fund owners will need to be cognizant of what the business will really look like when stimulus runs out.
- Deployment pace has been maintained despite an initial slow down with the onset of Covid. It also still maintains the level seen in 2019.
- Stimulus and the size of the market have been some of the key differentiators between the pandemic and the global financial crisis, thereby limiting distressed trades.