100% Rise in Private Debt Secondaries Deal Volume: Ely Place

The private debt secondary market will see increased deal flow and reduced discounts this year.

The sector will mature in the coming year, resulting in a “large growth in volume” and quantity of deals, according to Ely Place Partners’ latest Private Debt Secondary Market Survey. Increased competition and a stabilized economy may also lead to increased prices.

The private debt secondary deal volume will likely increase by more than 100% this year, reaching $10 billion to $15 billion in closed transactions, according to the survey.

Despite an increase in general partner (GP)-led acquisitions, limited partners (LPs) are driving most of the transactions, with pension funds serving as the primary sellers.

“Private debt secondary deals have been growing steadily in size and number over the past 12 months,” said Danniel Roddick, founder of Ely Place Partners, which works with private equity, credit, infrastructure, and venture GPs to raise capital from investors and often acts as an intermediary on secondary transactions.

Private debt secondaries are a recent area of interest, as Pantheon and other established alternative investment firms expand their offerings to suit investor demand.

“The establishment of a dedicated buyer universe has given LPs confidence to bring large portfolios to market,” Roddick added. “At the same time, GPs are proactively taking advantage of the market to accelerate liquidity for their investors.”

Much of the appeal is also connected to fees. Ely Place Partners discovered a wide range of prices in the mark. The survey stated that competition for good-quality senior loans remained considerable, driving pricing closer to par.