Secondaries (PCA) vs. Sponsors IB groups
Going to be interning with an EB (Evercore/Lazard/PJT) in NY this summer and one of their strong subgroups focuses on secondary advisory. How does this differ from a true Financial Sponsors Group at, say, a BB like BAML/CS/Barclays? Modelling, hours, comp, exits after analyst or associate level?
Interned at one of those last summer.
Hours: 10am - 1/2am M-F, Weekends mostly free
Comp: Better than M&A at associate+, been killing it, for Analyst lots of top bucket allocations
Modelling: None during internship, would be some for single asset GP deals... (not too familiar with financial sponsor teams... feel like they make very basic models too, but headhunters give them more credit during PE recruiting from my observation)
Exits: Lots of people stay on because of how lucrative it is, and hours are somewhat reasonable... those that want to do PE usually lateral to M&A IBD (either internally or externally) and recruit from there
Do you have any advice on getting up to speed in the secondaries space (books, papers, etc.) before an internship in a PCA group?
No books as this field is so new.
Coller has a good secondaries report. Follow secondaries firms on Linkedin, there sometimes also free webinars you can sign up for.
Which firm? Trying to find the other interns in my class lol
Can you PM me? Have a PCA SA interview coming up
Evercore -> does mix of GP and LP transactions
Lazard -> mostly GP transactions
PJT -> mostly GP... but head of group left to start his own buyside shop affiliated with Stone Point
I’m not very familiar with secondary advisory, but I’m curious what GP transactions look like. Is the LP/GP process synonymous with the buy side/sell side M&A process but selling and buying stakes in PE funds instead of companies?
Based on my observation, from a short virtual internship.
It is pretty similar to a traditional M&A process with some differences.
1. You are exclusively dealing with a group of sophisticated buyers and sellers. Historically, GP-led has been done only by funds that are underperforming. But now you have top-tier funds also exploring this option. The downside I see with that for an Analyst is that the GP would provide you with their model and take-point in answering DD questions
2. There are sometimes more emphasis on deal structuring than valuation... some structure don't even really require you to value to the companies
3. Similar to the point above, PCA provides value in terms of i) deal structuring, ii) auction process and less so in terms of (sector) industry knowledge. Most buyer questions are deferred to the GP
Guess all of the above are sorta "cons". The pros are probably the comp and also having a rare skillset in a fast-growing asset class
Also, it is almost all sell-side mandates.
Any insight on similar groups but at BBs at UBS/CS/Citi? Heard GS started a similar secondary advisory business
Evercore, Credit Suisse, Campbell Lutyens and Lazard seem to be the most active. PJT and Greenhill have lost a few people. GS new. Others I haven’t seen around much
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