07 │ GP-led transaction activity analysis
Multi-asset continuation fund volume outpaced single-asset deals, a reversal from 2022.
Type of GP-led transactions
- The volume of GP-led transactions rose nearly 5% from 2022 to 2023 to reach $45 billion. Increased volume reflected a boost in dry powder, particularly from dedicated GP-led pools of capital that were closed in 2023, and new investors focusing on continuation funds.
- Multi-asset transactions outpaced single-asset transactions by 6%, which is a reversal from last year when concentrated transactions outpaced multi-asset deals by 5%. In 2023, GPs used continuation funds not only to hold onto their best assets, but also as a tool to increase DPI. Multi-asset transactions can significantly increase DPI and better position a GP to approach the market for fundraising.
GP-led transactions by type, 2023¹
- Split by transaction value (purchase price plus unfunded) per respondent.
GP-led assets sold by strategy
- Valuations played a significant role in determining where investors deployed capital. As such, there was a rotation out of highly-priced technology exposure into more modestly valued businesses in the industrials sector. Healthcare continues to attract capital as it is generally not correlated to the economy and continues to benefit from secular trends.
- There was a distinct aversion to cyclical sectors such as consumer, chemicals, and manufacturing.
GP-led volumes by strategy, 2023¹
GP-led volumes by industry (private equity), 2023¹
- Split by transaction value (purchase price plus unfunded) per respondent.
Primary stapled ratios were slightly weaker due to light competitive tension in 2023.
Stapled primary capital in GP-led transactions
- The average primary stapled ratio for GP-led transactions in 2023 increased slightly to a ratio of 2.9 secondary dollars to every 1 primary dollar, implying less staple per dollar of secondary deployed. This reflected a less competitive market environment where secondary buyers had negotiating leverage and many opportunities for capital deployment.
Average ratio of secondary to stapled primary capital in GP-led transactions¹
- Stapled primary capital refers to a commitment to a fund for the same GP. On average, for every $2.9 of capital for secondary assets deployed, $1 of primary capital was committed in 2023 for transactions with a stapled element.
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