Secondaries / BX Secondaries / strategic partners

Based on the most helpful WSO content, the secondary market, particularly Blackstone Strategic Partners (BX SP), is a fascinating area within finance that has garnered attention for its growth and unique position in the investment landscape. Here's a breakdown of insights related to BX SP and general secondary roles, focusing on perceptions, pay, and progression:

Perception and Role in the Market:

• Growth and Niche: The secondary market is an explosively growing niche within finance. It's noted for its significant fund sizes and the ability to close deals frequently. For instance, BX SP has been highlighted for its stellar track record and is one of the largest secondary funds globally.
• Misconceptions: There's a misconception that secondaries are less prestigious or a fallback option compared to direct private equity roles. However, professionals in the field, including those at BX SP, often find the work engaging and value the unique investment opportunities it presents.

Pay and Compensation:

• Competitive Pay: Both Goldman Sachs and Blackstone, including BX SP, are known to pay exceptionally well. The secondary market can be lucrative, with significant carry potential. For example, it's mentioned that SP charges a 12.5% carry, indicating substantial earnings from successful fund performance.
• Comparison with Direct PE: While direct PE might offer different financial incentives, secondaries, especially at top firms like BX SP, offer competitive compensation packages. The exact figures can vary, but the sector's growth and fund sizes suggest strong pay potential.

Progression and Career Path:

• Career Opportunities: Starting a career in secondaries, including at BX SP, can be a strategic move. The sector offers a blend of investment analysis and deal-making that can be both challenging and rewarding.
• Exit Opportunities: For analysts and associates, the exit opportunities can include transitioning to direct PE roles, moving into other areas of finance, or climbing the ladder within the secondaries market itself. The skills and experience gained in secondaries are valuable and transferable.

General Insights:

• Dynamic Sector: The secondary market is dynamic, with a focus on transactions that include GP-led restructurings, LP portfolio sales, and more. This variety can offer a broad exposure to different aspects of the investment process.
• Firm Reputation: Firms like BX SP are well-regarded in the industry, not just for their financial performance but also for their contributions to the community and the broader financial ecosystem.

In summary, the secondary market, and specifically Blackstone Strategic Partners, offers a compelling career path with competitive pay, significant growth potential, and a diverse range of investment opportunities. While it may be viewed differently from traditional direct PE roles, it holds its own in terms of prestige, compensation, and career development.

Sources: Blackstone Strategic Partners in 2019?, Thoughts on Blackstone adjusting their recruiting process?, Q&A: PE Secondaries Principal, Blackstone Investor Day Takeaway