Lazard 2022 Secondary Market Report

Reports and studies — Financial Advisory, Secondary Market

February 14, 2023

Another $100B+ Year, Despite Ongoing Economic Disruption

The secondary market delivered a second consecutive year of estimated volumes in excess of $100B in 2022, continuing to prove itself as a highly relevant part of the private capital markets, irrespective of the macroeconomic environment. Supporting this statement are a number of key findings from our survey of 2022, which include:

  • GP-led transactions comprised ~43% of the secondary market in 2022, with continuation funds (~75% of the GP-led market) now firmly established alongside IPOs and M&A as a route to liquidity for GPs
  • LP-led volumes landed at close to $60B in 2022, with 500+ transactions completed in this arena, driven predominately by the desire from selling LPs to accelerate liquidity and the denominator effect

That is not to say that the market was immune from the macroeconomic and geopolitical disruption of 2022: volumes were down ~20% on 2021. This decline can be attributed to, amongst other things, bid/ask spreads on LP sales (as declines in the public markets increased the difficulty of assessing the fair value of private investments) and secondary firms increasing selectivity on GP-led deals after a substantial year of deployment in 2021.

Key Report Findings

Outlook for 2023

Looking forward to 2023, our survey suggests that volumes will reach a new record at $135B.* We are also optimistic for a number of reasons, including:

  • Ongoing fundraising and reduced dry powder both had a significant influence on volumes in 2022, which should improve in 2023 as fresh capital comes online (~$95B of capital expected to be raised)
  • Secondary market volumes are linked to AuM levels in broader private capital markets, which remain substantial following years of record fundraising
  • GPs increasingly look to secondary markets for liquidity as M&A and IPO markets continue to be difficult

* based on majority feedback from respondents

Click here to read the 2022 Secondary Market Report.

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