Tier 1 PCA/Secondary Advisory
There recently was an interesting post on the PCA market and I went into detail about the various shops out there. I got some heat for my view that Goldman is establishing a great shop since they're presently untested and my view that Lazard is more of a Tier 2 since they're going to need to do a total rebuild. It would be great to discuss the following groups in more detail. Culture, hours, pay, deal dynamics, assets, anything:
1. Evercore: Highest volume and highest paying. Turnover is high, super high stress environment.
2. PJT: More of a single-asset continuation fund shop - can they really compete with EVR without a massive increase in headcount and experience?
3. Lazard: More of a GP-led shop but got gutted talent wise and needing to do a total rebuild.
4. Jefferies: Ex Greenhill-Cogent team. I've seen quite a few of their deals in the market both on the GP-led and LP side and the quality was high.
Just read the news that an additional two staff from Lazard left for Credit Suisse (seems title/$ driven).
One of them jumped from Associate all the way to Director. The other was a VP lateral.
Typical sloppy secondaries investor reporting - looking at their LinkedIn you can see they each got a bump (associate to VP and VP to director). Agree that it was probably title/$ driven to help jump start the secondaries group over there.
To the rebuild point...same article points out LAZ hired a couple MDs with one presumably US based.
Hah ya it looks like they got the title wrong.
What is CS's reputation in the secondaries market? Never seen them on any deals - are they any good? Seems to have turnover every now and then for such a small team. I hear they were excited to see their Director leave for Houlihan to make room for new hires.
Seems like this poor guy (who is now at Houlihan) is becoming the subject of a lot of rumors. In my personal dealings with him he has been nothing but really nice but I have also heard that pretty much nothing got done while he was at CS.I have only seen a few single asset deals from CS.
From my interactions with CS, they seemed to only bring deals to market that no one wants, like Latin American GPs that are on the verge of dying.
And this nice guy I think we're talking about put me to sleep when I've been on the phone with him.
Do you know which PCA teams accept interns? Outside of Evercore and Lazard, as they're done already.
Jefferies does
Thanks for that! Any other shops you're aware of that take interns? (That deal with secondaries)
Broad question from someone not in the business - why are you in/looking at secondaries groups? What aspects of PCA vs coverage vs other product groups do you prefer? Have gotten a few HH outreaches and I do not know much about the landscape.
I'm on the buyside at a secondaries shop but I've hired a few guys from various PCA teams. I'd say a benefit must be that you're interacting daily with groups you could eventually make an exit to. Apart from that, I'd love to hear from people who work on the sell-side.
Worked in a PCA group for a bit. Does it open up more exit opps? Probably. Is the work mind-numbingly boring? Yes. All of the tedious parts of banking—editing a PowerPoint for v72—with none of the skills—learning to model.
I get that for the more process-oriented LP deals but is that really true for GP deals?
My experience has been even if it’s a single-asset deal that requires modeling, you will work with the banking coverage group, and they will handle that aspect. So I guess you can see it and understand how it works, but it won’t be you who holds the pen
What would a VP or Principal even do on a PCA Secondaries team at a T1? Is it just relationship management, project management and running deals?
Unlike IBD, a lot of Principal/VP level folks at PCA groups are expected to get their hands dirty. So that's everything from going into PPTs and making edits, opening up excels and models to make direct edits, sketch up process docs, slides, etc, and also talk to buyers and run the process.
Until you make Director level and up, I would expect everyone at the Principal/VP level and below to do a little bit of all junior level work.
Unless you're at a T1, like EVR, LAZ or PJT PH, you won't get paid like the Sponsor Coverage teams.
Exits mostly to secondaries buyside, other secondaries advisory firms, FoF, investor relations.
To add, unlike Sponsors Coverage Groups at banks, you are unlikely to ever, if at all, touch or build an LBO model. Most of your 'modeling' in PCA will be fund level modeling, but I've learned that those models are never 'accurate'. You're really better off the GP's in-house IR and accounting teams give you specific numbers.
Thoughts on Houlihan PFG? Comp, exits, etc
It's a brand new team. No clue.
Primary fundraisings or secondaries? Houlihan PFG in generally has been an inorganic effort for HL - they acquired a placement agent and have the old BearTooth Advisors team running it. I have been in the primary PE fundraising biz my entire career and had never heard of BearTooth Advisors.
Houlihan's secondaries team is new. They have a Bagelcel running it. I hear he gets bear teeth shoved up his arse lolzx
Wtf is bagelcel? And what's going up his butt? 😂
What about UBS secondaries group?
💩 seen 2 deals from them in the last 3 years. Pretty crummy leadership.
Lazard>
Why do you say that?
Bump
Not sure if this is the right forum and happy to PM someone rather than discuss in the general thread, as I feel it’s not the place.
Does anyone know what happened to Marc?
No, but he was a wonderful guy. Really passionate, hard working, and funny. Way too young to go. Very sad.
Bump
I wouldn’t say it’s a “high stress environment”.
Answering the modeling question I’ve seen it a few ways: sponsor just has us repackage their internal model to build cases in for LP liquidity options or we just provide internal models. For what it’s worth, we rarely work with our coverage teams
Per SI - GP led Continuation funds in August by advisor
2 x evercore, CS , 1 x Lazard, UBS, six point, asante, m20
Patchy reporting but no sign of PJT
Good to know. I wonder how Houlihan is going to fit into the mix.
I'm not doubting your sources but those stats seem very suspect considering I have seen PJT PH on 4 different GP-leds in the last 3 months
It's the lack of announcements/press releases for these GP deals. Many aren't reported or picked up by news sources unless they're massive.
Traditional exit market will cool down before valuations do. More continuation vehicles for GPs looking to crystallise returns but without viable exit. Paid for by secondary dry powder. LPs forced to sell due to re ups in primaries. Medium term hard to maintain valuations. Forced selling. Advisors getting a clip every time. Fees for everyone.
I wonder how yesterday's article on proposed carried interest reforms may ultimately impact this market, especially with longer hold requirements. Hopefully it does not pass.
Fearmongering click bait. Considering PE is exit opp from the west wing would consider likelihood v low.
thanks. i can sleep better now.
Co-head of advisory at Credit Suisse to depart...
Any word on where he's leaving for?
Heard it is either Cebile or Setter. Jk. 😂
Any color on Goldman's new team? Saw a posting on Linkedin. Currently work in MM M&A
It literally just started so TBD what the experience and group will look like. Not sure what the deal flow will look like initially but assume the GS name and connections should help get it off the ground. Probably a cool place to help build a business but I don't think that's where I would cut my teeth when ramping up the learning curve.
As someone who's joining a PCA team soon, this thread (and the previous) have been very helpful. Cheers everyone for the info
How does Goldman stack up against the EBs in terms of upward mobility and exits?
Anyone pretending to have insights on this is lying.
It's a brand-new and unproven group that will probably scale up significantly over the next year. The Goldman name alone will likely place it in the top bracket for Secondary Advisory, but nobody, not even DJ Sol himself, can tell you where the people in this group will end up.
so when deciding between GS and an EB, under what circumstances would taking GS be the better move?
Interviewing with a PCA team for an entry level position. Have prior IB sector coverage internship and other general finance experience. What can one expect in terms of technicals? Same as an IB interview i.e comps, DCF and LBOs? Or since this isn't a modelling heavy team, questions are usually fit based?
Hey, would you be open to providing insight on your process for the analyst role at a PCA group? Would really appreciate learning about what technicals to expect and what to focus on for interview prep. Thank you!
What are the traditional exit opps from a PCA team?
Lateralling elsewhere in the bank (coverage, other product groups, capital markets etc.), secondary PE funds, FoF, IR. Guessing that with the rise of single asset GP-led deals you might be able to exit to MM PE if that was your focus. It's the same or similar pay to traditional coverage/M&A with slightly better hours...a lot of people stick around too.
Thoughts on Campbell Lutyens secondary advisory team? Culture / hours, compensation?
Reputable shot with seniors that came from UBS. Can't speak to specifics but they're respected in the area. Would not say they're the top shop but definitely legit.
Any insights on the APAC side? Who are the leading PCA shops (know a few EBs have presence there, for eg LAZ/EVC/GHL)? Also curious if GP-led is a big thing in Asia because from what I observed most of the recent GP-led deals were in either US/Europe...
Anyway this thread has been super helpful, let's keep it going!
Any idea on PCA shop comp in APAC? Is it in line with the coverage teams?
Pay is roughly the same for the PCA groups inside BBs / EBs. Teams are smaller though, and you will be more subject to the revenue generation abilities of your MDs / seniors. So the upside is there, but generally, the senior talent in APAC is pretty lacking, so revenue / bonuses are likely to suffer. That being said, all coverage groups are suffering with the China apocalypse right now.
Lazard - was the market leader. Cornered the market on China growth / VC GP-leds for the last 5 years. Largely disappeared now since the China market imploded. Trying to do more direct / co-invest deals and push into the ANZ market. Allergic to LP-leds due to low fees.
PJT - does maybe 1-2 deals a year. Not really much of a presence.
Evercore - new kid on the block. Came in with a couple of landmark deals over the last 1-2 years, but team is small. Unclear if success is continuable.
Greenhill - does pretty much only LP-leds that they win by charging almost zero fees. They had a pretty good drive into China GP-leds and had very good traction recently, but I think the guy leading that effort left, and the China market is basically a no-go for buyers.
Campbell Lutyens - pretty solid primary fundraising business, but small secondary team. Tries to do both LP-leds and GP-leds, but ends up picking up the scraps on the LP-led side after Greenhill (because Campbell tries to charge fees that actually pay their bills), and gets an occasional GP-led.
UBS - was non-existent for a few years. Had some recent success on the GP-led side. Interested to see how it goes. Small team.
Basically, the GP-led side is a foot race between Lazard, Evercore, and UBS. The LP-led side is pretty much just Greenhill, but that is more by virtue of no one else actually being interested in challenging them for the crown of charging single-digit bps on $200M LP portfolios.
HL's PFG is comically terrible. I worked with them (not for them) over the summer and was extremely disappointed given that my other interaction with different HL groups were very positive.
This is the secondaries team at HL you're referring to?
Yeap. Any stories you have on them?
Just sounds like it’s a consensus where the HL secondaries team and it’s senior folks are all worst of breed
Any insight into HL team?
See the comments above for updated HL secondaries performance
Any updates on LAZ? Particularly after the head of US left for BofA? Feel like I see their name less frequently but still on high quality deals.
not 100% sure but I think their pca team are a mix of pfg and advisory, so not solely dedicated to the advisory side like evr
They have separate groups but both are under the PCA umbrella
So Amanda was a mediocre MD at best who LAZ kinda nudged out after paying her too much. Lazards gp-led practice fell off and jefferies took that spot for sure. They are still quite active in the lp-led and fundraising space but I don’t think they’ve been viewed as a competitor for many of the incoming players like they see evr & Jeff
Appreciate the insight. It’s interesting cuz the marketing deck I saw definitely still positions themselves as GP-led focused (granted it was a year old). They are pretty consistently on some chunky CVs but agreed, not as active volume wise as JEF/EVR.
Any insight on group culture, sweatiness, etc.?
Ya but she's decent 😎
anyone know placement agents like campbell lutyens, rede partners, asante reputation in the industry? exits? competitiveness?
Campbell Lutyens is head and shoulders above Rede & Asante. Think placement agents / secondary advisory firms offer a ton of upside vs. bigger bank platforms but its imperative you do your research. Quality vastly differs between them
Would honestly advise against any of the independent placement agents aside from maybe CL. Independent placement agent model is on its way out… banks with the synergies across other product/industry groups are just going to dominate in the long term, particularly on the GP-led side. You can see it with CL, they did that partnership with JPM to try and catch up and have “asset level expertise” but I think most people can see through that… it’s hard enough to get industry teams to help out at a bank that has them internally… I can’t imagine how much fee you’d have to give up to incentivize external industry teams. And you can see it in their deal flow these days, it’s like 70% LP-led. I’d say most of the time when these groups win GP-led deals it’s because they are advising on the primary, otherwise it’s hard to compete when banks have relationships through their industry teams.
Strange not to see Moelis PFA on this list.
Do a lot of continuation fund and gp related advisory.
Moelis PFA seems to be only plugged into bespoke capital raises and with the headcount they have… man they should be much more active which says a lot about the group
I mean like many of the newer entrants they’ve only closed a handful of deals. Also don’t have a group head rn
what about park hill, do they have strong deal flow/ exit opps?
Rodney Reid seems like the most universally disliked person in secondaries lol
Isn’t he leaving Moelis soon?
So secondariesinvestor released some datapoints
all things considered here is my takeaway on rankings:
EVR, JEF, PJT, LAZ
CL (legacy brand soon to be gone), Moelis, maybe Baird?
Eaton (stifel), Houlihan (making good noise), Blair (dont know how much longer custar can use his wife for deal flow), RJ
Placement agents soon to be replaced with independent advisory boutiques
all the new mm guys, bofa lol they have a popular md but no proof of concept
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