casemark/preparing-secondary-market-reports

Preparing Secondary Market Reports

Synthesizes secondary market activity with volume trends, pricing benchmarks, and deal type composition for market participants.

When To Use

• Producing periodic (quarterly/annual) secondary market overview reports for LPs, GPs, or advisory clients
• Benchmarking secondary transaction pricing against historical NAV discounts/premiums
• Analyzing deal-type composition shifts (LP-led vs. GP-led continuation vehicles, directs, tenders, strip sales)
• Tracking market volume trends to inform portfolio allocation or disposition timing
• Preparing pitch materials or market context sections for secondary fund marketing

Inputs To Gather

• Reporting period: Quarter(s) and/or year(s) covered
• Transaction data: Closed deal volume, pricing (bid/ask and closing), deal count by type
• Pricing benchmarks: Average bid as % of NAV by strategy (buyout, venture, real assets, credit, infrastructure)
• Deal-type breakdown: LP portfolio sales, GP-led continuation vehicles, direct secondaries, tender offers, structured/preferred equity, fund restructurings
• Fundraising data: Secondary fund closings, capital overhang, dry powder estimates
• Comparable period data: Prior quarter and prior-year-period figures for trend analysis
• Notable transactions: Marquee deals, record-setting transactions, or structurally novel deals worth highlighting
• Source attribution: Greenhill/Jefferies, Evercore, Lazard, Setter Capital, industry databases, or proprietary data — identify each source clearly
• Audience and scope: Who will consume the report and what level of granularity is expected

Workflow

1. Define scope and periodicity

   • Confirm reporting period, audience (internal investment committee, LP advisory board, external marketing), and depth of analysis required
   • Determine whether the report is a standalone market update or a section within a broader fund report

2. Aggregate and normalize data

   • Collect transaction volume from multiple sources; reconcile discrepancies in reported totals [VERIFY that source methodologies are consistent — e.g., some advisors include unfunded commitments in volume, others do not]
   • Normalize pricing data to a common basis (% of NAV at transaction close vs. at reference date)
   • Segment deals by type: LP-led (portfolio sales, single-fund strips, stapled transactions), GP-led (continuation vehicles, tender offers, NAV loans reclassified as secondaries)

3. Analyze volume and pricing trends

   • Compare current-period volume to trailing quarters and the same period in prior years
   • Calculate average pricing by strategy bucket; note dispersion (median vs. mean, interquartile range if data permits)
   • Identify directional shifts: Are GP-led transactions growing as a share of total volume? Is venture pricing compressing while buyout holds? Are bid-ask spreads narrowing?

4. Assess deal-type composition

   • Break out LP-led vs. GP-led share of total volume (by dollar amount and deal count)
   • Within GP-led, distinguish single-asset continuation vehicles from multi-asset/portfolio CVs
   • Note emerging structures: preferred equity secondaries, NAV-based lending overlaps, co-invest strip sales, deferred payment mechanisms

5. Contextualize with fundraising and dry powder

   • Report secondary fund closings in the period and capital overhang relative to annual transaction volume
   • Assess supply/demand dynamics: Is dry powder creating pricing pressure? Are LP sellers pulling back due to improved pricing?

6. Draft the report

   • Executive summary: Key headline figures — total volume, average pricing, dominant deal type, notable shift vs. prior period
   • Volume overview: Table or chart-ready data showing period-over-period comparisons
   • Pricing analysis: Strategy-level pricing table with NAV discount/premium, trend arrows, and commentary on outliers
   • Deal-type composition: Pie chart or stacked bar data with narrative on structural trends
   • Notable transactions: 3–5 marquee deals with brief descriptions (counterparties anonymized unless public)
   • Market outlook: Forward-looking commentary on expected volume trajectory, pricing direction, and structural evolution

7. Review and finalize

   • Cross-check all figures against source data; ensure internal consistency (segment volumes sum to total)
   • Confirm source attribution is complete and dates are accurate
   • Verify that forward-looking statements are appropriately qualified

Output

A structured secondary market report containing:

• Executive summary with headline metrics
• Volume trend analysis with period-over-period comparison (tables/chart-ready data)
• Pricing benchmarks by strategy with historical context
• Deal-type composition breakdown (LP-led, GP-led, direct, structured)
• Fundraising and dry powder context
• Notable transaction highlights
• Market outlook with qualified forward-looking commentary
• Full source attribution and methodology notes

Quality Checks

• [ ] All volume and pricing figures reconcile across sections and sum correctly
• [ ] Pricing is expressed on a consistent basis (% of NAV) with reference date specified
• [ ] Deal-type categories are mutually exclusive and collectively exhaustive — no double-counting
• [ ] Sources are cited for every data point; proprietary estimates are labeled as such
• [ ] Prior-period comparisons use the same methodology and source vintage [VERIFY if source revised historical figures]
• [ ] Forward-looking statements use hedging language ("we expect," "market participants anticipate") and are clearly distinguished from reported data
• [ ] Report is calibrated to audience — internal reports may include proprietary deal flow data; external reports should anonymize where required
• [ ] Any data gaps or known limitations are disclosed (e.g., "GP-led volume may be understated due to delayed reporting of continuation vehicles")