07 | GP-led transaction activity analysis

Surge in single-asset continuation funds as M&A market remained soft.

Type of GP-led transactions in H1 2024¹

  • Single-asset continuation fund transaction volumes were 2.4x higher compared to the prior year, growing from $7.1bn in H1 2023 to $17.2bn in H1 2024. With the M&A and IPO markets still locked up, GPs increasingly pivoted to the single-asset continuation fund market to generate optional liquidity, while continuing to own the asset at modest prevailing valuations.
  1. Split by transaction value (purchase price plus unfunded) per respondent

GP commitment as a % of total deal size¹

  • Alignment between GPs and LPs has become increasingly important, with GP commitments to continuation vehicles exceeding 5% rising from 53% in 2021 to 72% in H1 2024. Secondary buyers focus closely on alignment, expecting GPs to reinvest at least all crystallized carried interest and existing commitments into new vehicles.
  1. Split by transaction value (purchase price plus unfunded) per respondent

Technology sector leads resurgence in GP-led transactions.

Average age of GP-led assets in H1 2024¹

  • Approximately 80% of the investments in GP-led transactions were made in companies that were less than six years old as GPs have used continuation funds to monetize companies that would typically be in the harvest period.
  1. Split by transaction value (purchase price plus unfunded) per respondent

GP-led assets sold by strategy in H1 2024¹

  • There has been a meaningful shift in investor appetite towards technology investments in H1 2024, accounting for 34% of all PE volumes, compared to only 15% in FY 2023.
  • Technology has swung back in favor as the top assets continue to perform and looked less expensive compared to public market values that have run up over the past 12 months.

GP-led deals

GP-led volumes by industry (Private Equity)

  1. Split by transaction value (purchase price plus unfunded) per respondent

GP-led transactions offer value as buyers maintain pricing discipline.

Average TEV / EBITDA multiple of assets acquired (by volume)¹

  • GP-led transactions represent good relative value, as the average TEV/EBITDA multiple of closed deals was 13.5x¹ compared to 17.2x for the S&P 500².
  • However, secondary buyers are still price conscious as most transactions closed below 17.5x TEV/EBITDA.

GP-led deals

  1. Split by transaction value (purchase price plus unfunded) per respondent
  2. CapIQ as at 7/12/2024. Past performance is not indicative of future results

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