I invest in GP-led secondaries, and it’s awesome.

Hi -

Hours per week at each level

Comp at each level

Thank you!

is your fund part of a broader PE firm? such as alpinvest with carlyle and strat partners with blackstone etc.

do most associates come from traditional IB backgrounds? how do you view analysts working in private capital advisory / secondary advisory?

what's associate comp and how does comp progress as you move up?

understand that MBAs are not required for the most part in the secondaries space, but if you wanted to get an MBA, would your firm sponsor you?

Thanks for taking questions:

1. Does your fund hire juniors mostly from post-IB/PE or other routes? I’d imagine knowing the deal process / running a model would be helpful for co-invests, but not sure exactly how often that skill set is used in your field and whether it’s as useful for secondaries

2. How does your firm position itself to compete for LPs? Does your firm go on no fees/only carry basis?

3. What’s your firm’s investment mandate? Do you see your firm exploring other industries, moving up/down the market in a future fund?

4. What thought process goes into building a commingled fund? Do you design it with an existing LPs portfolio in mind?

5. In terms of exits, how often do people leave to the GP side vs. move to one of your clients? For those who stay, how would you describe the job stability relative to compensation?

Cheers!

How do you view private capital advisory / secondary advisory investment banking analysts in recruiting for buy-side secondaries?

Would your firm (or other comparables) ever take a look at MBB consultants? Those numbers look super good, and I am quite bullish on the space in general too.

I would highlight that the OP's numbers (especially carried interest) are very generous. OP - that's really amazing you got to find the role you're in!

I personally have friends in the secondaries space at well-known shops in NYC, and some do pay the ~$220k-$240k number mentioned, but they do not receive any carry at all. The hours are a little better than buyout shops, but still long hours. Would say they still work 60-70 hours a week consistently, longer when trying to close a deal. Definitely weekend work as well.

The compensation difference between secondaries and buyout shops get larger as you progress throughout the ranks. This is because secondaries firms only charge 1/10 vs the 2/20+ that PE buyout shops charge. Regardless, great place to be in if you particularly enjoy the deal structuring part of finance. Also should mention that GP-led secondaries deals are as much work as regular buyout deals except maybe a little less diligence. 

Plenty of friends at alpinvest/harbourvest.

Your numbers are 2x theirs. Congrats though!

What does the day-to-day look like for an associate? 

I'm quite familiar with the PE Secondaries space and comp at the associate level are more like the following:

-ASO 0/1: $125-175k all in (with some hitting low $200s and some even below that $125k number. I think the last total comp number I saw at Coller for a jr. associate was around the low $100s)

-ASO 2: $150-200k all in (again with some variations across firms)

-ASO 3: $175k-225k (again, there will be variations)

No idea where the OP works, but I guess they overpay for top talent. I know BX/Strat Partners pays better than most/all PE Secondaries firms, but the OP's employer tops BX by far

For secondaries, how do you determine value? What are appropriate level of returns? When discussing this product within the space, what are most important factors everyone cares about?

Thanks for the q&a.

1) how does GP led differ to LP led secondaries? I understand the two differences at a high level but in terms of the details how does it differ? I.e Do you do more in depth modelling? Is one harder than the other? Do hours differ? Does compensation differ?

2) how often are you on a live transaction? Do they occur more often than traditional PE? Also what do your hours look like when on a live deal and when not on a live deal?

3) what are your responsibilities / typical tasks when not on a live deal? Is it just actively looking for the next deal?

Any thoughts on secondaries teams of pensions? (e.g. CPP / GIC)

Seems to be conflicting information on comp above. Can anyone please provide more color? Particularly interested in junior roles

Goddamn that is incredible comp, especially the carry.

Thoughts on emergence of firms such as Whitehorse in Canada looking at alternatives to secondaries? They've been fundraising like crazy over the past few years. Curious to see your views on how that is impacting the competitive landscape for secondary txns, if at all.

I work on the advisory side of GP secondaries. The main thing that we see is that there aren't enough people investing in the space.

The top few buyers control about half of the market which causes some price dislocation due to some lack of competition. Pretty much every reputable bank is poaching or starting secondary advisory if they don't have it. The biggest reason you see funds pop up or able to raise money so quickly is because of how fast they can deploy the capital. I've seen multi-billion dollar funds deploy 100% of their capital in 18 months. They keep fundraising because the market appetite is larger than the amount of investible capital in the space. There are a ton of fund of fund investors and secondary investors but there are only a few scaled platforms that are willing to take the lead on a GP-led secondary transaction.

Now that Guggenheim, Rothschild, Moelis, and Jefferies are getting into the advisory game expect the market to continue to grow. The more bankers that are out pitching GP-led secondary transactions, the more transactions that will happen. More GP-led appetite will just allow the secondary investors to keep raising larger and larger funds.

Can somewhat corroborate the OPs seemingly ridiculous comp numbers for associates. 
 

The market is growing extremely quickly, and the comp has reflected that for some players that are scaling quickly but still have room for headcount and fund size growth. As others have said, the well established players who span across secondaries (Coller, Landmark, Alpinvest, Strategic Partners, etc.) tend to be below buyout comp. But niche roles focused on GP secondaries are in very high demand. 
 

As another data point, I am an associate at a similar firm to the OP (not the same one I infer based on details like fund size). Cash comp is $250-350k usd, carry of ~$1.5m/fund. 

Hey! Thanks for starting this thread. Could you shed some light on what your recruiting process was like? Did you go through headhunters and/or was there a lot of personal networking? Any advice in general in terms of recruiting?

Secondly, when did you realize this type of industry/role was for you vs more traditional buy-side investing roles.

Thanks!

Hey, I recently created a post on this, but mainly the question is should I stay in PE (Pension fund LP, infra&energy) or pursuit IB? PE as an LP comp is lower than GPs so that I think could be a determinant factor, but also, as an LP I got direct contact with KKR, Blackstone, etc. I am currently in a GS process to IBD analyst.

I've recently started in a similar role and feel underpaid- any insights to comp?

Fucking crazy comp numbers what the fuck

Who are the best paying GP led secondaries firms?

Hi this is really insightful, I am an intern and I was just curious how I could learn more about Secondaries, what are some metrics in the space and are there any publications I can read.

Which IBs do you find have the best GP led deal flow? Jefferies? Evercore?

What recruiter helped you find your current role in secondaries?

Sounds like OP works at Glend0wer, who were recently purchased by CVC. Needless to say, they have shit returns and are just a glorified co-invest fund with higher fees.

Do you think it's better to join a secondary fund solely focused on GP-leds, or one with a hybrid approach (GP leds and LP portfolios)?

How do you learn about this stuff?