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PJT Partners, Nasdaq Forge Private Markets Deal
Their agreement will provide more transparency for alternative asset managers doing deals in the rapidly growing secondaries market.
PJT Partners is turning to Nasdaq’s private markets business to strengthen its secondary investment advisory services for alternative asset managers.
The firms announced Tuesday an agreement under which PJT Partners will use Nasdaq Private Market’s technology to offer its clients and their investors a more efficient way of doing secondary deals. It’s another step toward standardizing the rapidly growing secondaries markets, where fund managers known as general partners, their limited partners, and investors transact.
Secondaries funds investing in private markets attracted about $30 billion last year, after raising a record $44 billion in 2017, according to Preqin, an alternative-assets data provider. The market for GP-sponsored secondaries is on pace to expand to $40 billion at the end of this year, soaring from $2 billion in 2013, PJT Partners and Nasdaq said.
“Over the past several years, we have seen dramatic growth in the GP-led secondary market,” Jon Costello, head of PJT Park Hill’s secondary advisory business, said in the joint statement with Nasdaq. “As the size and complexity of secondary transactions continue to increase, this partnership will enable us to offer our clients superior real-time data and deal transparency alongside efficient and scalable execution.”
In secondary markets, investors buy stakes in funds raised by alternative asset managers. While fundraising for investment pools targeting secondary markets plummeted during the first half of this year, a Preqin report last month suggested it was merely a “lull” as investors took a breather from record-breaking fundraising over the past couple years.
[II Deep Dive: Fundraising Plunges for Private Capital Secondaries Funds]
PJT Park Hill provides advisory and fundraising services for alternative investment managers including private equity, real estate, and hedge funds. The majority of secondaries funds now seeking capital are focused on private equity investments, according to the Preqin report.
Nasdaq’s technology is designed to meet the increasing deal flow in the secondaries market, said Eric Folkemer, the head of Nasdaq Private Market, in the statement. With PJT, “we will evolve the way GP buyers and sellers perform these transactions, while significantly reducing the historical inefficiencies from manual deal making methods,” Folkemer said.