Dry Powder: The Private Equity Podcast The Rise of the Secondaries Market: From Backwater to Boomtown
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Jan 16, 2024 
Nigel Dawn, senior managing director at Evercore, discusses the growth and development of the secondaries market over a 20-year period, exploring tools and strategies such as securitizing LP interests, selling notes in the bond market, and utilizing NAV loans. They also highlight the benefits of GPs retaining their investments, the use of continuation vehicles, and the potential growth and constraints of the secondary market in private equity.
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Offer Optional Liquidity With Continuations
- Use continuation funds to give LPs optional liquidity while preserving GP control and upside.
- Structure deals so investors can either take a solid realized return or roll into the new vehicle to stay exposed.
Tailor Vehicles To Return Large Cash
- Tailor continuation vehicles with mixes of control and minority stakes to return large-scale liquidity without forcing fire sales.
- Use these structures to return billions to LPs yet keep GP control over assets and upside.
Private IPOs Expand Investor Bases
- The 'private IPO' concept lets GPs sell minority stakes into a diversified investor base ahead of public listing.
- Nigel Gaugh says this creates a wider investor base for large companies when they eventually go public.