Leor Landa discusses the secondaries market with Buyouts
Leor Landa, partner and Investment Management head at Davis Polk, recently shared insights on the secondaries market in a discussion at the fourth annual Buyouts secondaries roundtable. According to Leor, there is a growing interest in GP-led transactions for several reasons. One key factor is the shift of liquidity from public to private markets, along with a decrease in M&A and IPO activity. This has created a need for alternative liquidity options like secondaries, especially as LPs seek more distributions.
GP-led deals are not only attractive to large sponsors but also to mid-market managers looking to balance successful deals that have outgrown their asset sizes. Leor highlighted that the infrastructure for these transactions has improved over time, making both LPs and GPs more comfortable with the process.
Reflecting on the evolution of the secondaries market, Leor mentioned that what started as a response to the financial crisis has now become a consistent and growing market. He emphasized the importance of credit secondaries in the future, especially given the size of the private credit market.
Regarding the rise of 40 Act funds, Leor explained that this trend is a natural extension of the growth seen in private equity, private credit, and hedge funds over the past decade. These funds offer retail investors a chance to mitigate risks and generate returns more quickly, aligning well with the appeal of secondaries.
While regulatory concerns around continuation fund deals exist, Leor stressed the importance of a well-structured market process with expert advisors to ensure transparency and fair pricing. Looking ahead to 2025, he predicted continued growth in the secondaries market as more investors are drawn to its benefits, even with an expected rebound in M&A and IPO activity.
Overall, Leor believes that secondaries will remain a bright spot in the fundraising market, with increasing volumes expected in the coming year. The article concluded with a positive outlook on the future of secondaries as a long-term investment strategy.
