October 9, 2018 (LONDON) – Proskauer held the second of their ‘Under the Microscope’ seminar series, providing a comprehensive analysis of the European secondaries market. The team analyzed key terms and conditions from 50+ secondary transactions, the complexities of GP-led transactions and the impact of US tax reform on the market. The seminar was led by partners Nigel van Zyl, Kate Simpson, Bruno Bertrand-Delfau and US Senior Counsel Matt Pincus.
Broken down by deal size, Proskauer’s private funds lawyers analyzed 25 terms from 50+ secondary transactions over the past 12 months to decipher what trends have emerged and how terms have evolved in the European secondaries market. “One of the key trends we are seeing is the growth of the use of deferred consideration and leverage particularly in larger transactions. This has led to more sophisticated security packages being put in place and also started to expanded the number of third party lenders looking to enter the secondary space.” said Kate Simpson, Private Funds partner in the London.
US Senior Counsel Matt Pincus focused on the financial impact on sellers and the market reaction to new US ECI withholding requirements for the transfers of partnership interests. “Due to recent changes in law, secondary transactions have become more complex to navigate and negotiate as new ECI rules force buyers to withhold US tax on purchases from non-US sellers” said Matt.
Partner Nigel van Zyl discussed the key drivers of GP-led deals and how to navigate and manage what can often be complicated transactions to achieve a successful outcome for all stakeholders. Key takeaways included the merits and risks of LP tender offers vs. GP-led asset sales, as well as the impact of recent SEC enforcement on future deals.
Built to Serve Asset ManagersKey Trends Affecting the European Secondaries Market
Proskauer offers a full suite of services for the investment management industry, with a market-leading global team dedicated solely to advising asset managers, investment funds and their advisers, financial institutions and institutional investors across the asset class. Our team has particular expertise with the complexities involved in structuring and negotiating secondary transactions and fund restructurings and advise a significant segment of the secondary market. We have experience acquiring and selling portfolios of partnership interests, including some of the largest bulk sales of interests in securities on the secondary market. Since 2017, we have advised on 140+ secondary transactions totaling over $23 billion in deal value. The cross border team of over 130 lawyers is based in the U.S., UK, Asia and Latin America and includes specialists in tax, ERISA, regulation, financial services, employment, insurance, fund finance, litigation and risk management who understand the unique technical and commercial issues relevant to investment managers.