What exactly is PCA / private capital advisory
I've been seeing a lot of postings for pca, private Capital advisory? Does anybody know what this actually is and what they actually do? What is the career path look like in that group? Thanks
Hey Associate 2 in IB - Gen, the following topics might be helpful:
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You're welcome.
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PCA groups advise companies selling secondary stakes in the private markets. I am in buy side secondaries and all the PCA groups show us deals. There are GP led, LP led, and direct secondaries. GP is a sponsor doing a continuation fund. LP is selling the LP stake in a fund generally to FoF and SWF. Direct secondaries is directly transferring existing shares outside of a primary round of financing. No new shares are created you just switch the name on the cap table essentially. We buy direct secondary stakes from founders and VC funds.
What the exit opps look like? Is it possible to exit to traditional buyout/secondaries PE?
Do folks in PCA find the work intellectually stimulating?
Answering this from the perspective of someone who works on GP-leds so can't comment on LP-leds. I personally love it and think it's the perfect balance of quantitatively and qualitatively intellectually stimulating. As you are a generalist, you get to look at a wide variety of industries, companies and business models which is exactly what I wanted in a role. I also find the market dynamics within secondaries to be fascinating. There is a wide variety of transaction structures so you can get creative in the levers you use to try and improve pricing and get a deal across the line. Finally, you don't go unnecessarily deep on diligence because the buyers (secondary investors) in this market are ultimately passive investors and don't need to turn over every stone. That last point can be a good or a bad thing depending on what you want to do long term. For me, it's a great thing as I want to stay in secondaries and I think drilling that deep into a company would drive me crazy.
Thanks for the color man. Is it possible to move from PCA to M&A in firms like EVR/PJT/LAZ?
How's the culture at the top EBs for PCA like EVR/LAZ?PJT?
PCA is by far the most profitable team at LAZ, at least within the EU. It operates as a global team, avoiding the restrictive, localized approach of “don’t talk to my clients without consulting me first.”
PCA isn’t even part of the EU/London P&L.
The role is sales-focused, and some individuals have even transitioned from M&A to PCA.
In London the only team that is not in decadence in LAZ (probably because operates independently of EU management)
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You essentially advise GPs (Sponsors) on continuation funds, and this is called Secondary Advisory, note it's different from secondary buyout.
Process wise when you work its exactly the same as M&A. You provide an IM which is more or less similar to as one you do in M&A but you pitch to Secondaries fund, i.e., Blackstone Strategic Partners, Glendower, HarbourVest Partners, etc. An example of how it works is that a GP for some reason want to hold its portfolio company longer but cannot (could be to meet threshold IRR) so they would "sell" the portco into a continuation fund where for instance Blackstone Strategic Partners would come in as an LP.
Biggest players are Evercore and Lazard and they have a majority of the market share but they are a few upcoming.
Exit is limited, would say almost impossible to go to PE and skillset is very different.
could you talk more about the skillset? Is there no M&A modelling as you mentioned or is it very different than what's helpful for PE?
can you see yourself doing PCA longer-term? if so why/why not?
Anyone has a perspective on the LP-side of PCA? Hours, work done, upward mobility, etc?
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