Investment bank PJT Partners and stock exchange operator Nasdaq Inc said on Tuesday they had agreed on a partnership to provide data and technology to the opaque market of selling interests in private equity funds. The venture between Nasdaq Private Market and Park Hill, PJT's secondary advisory business, aims to illuminate what has been an obscure corner of the private equity industry.
The partnership is focused on so-called general partner-led, or GP, secondary transactions, whereby a fund manager looks to extend the life of a buyout fund from its typical 10-12 year investment period by offering an exit to investors who would rather cash out.
"Our clients will be able to view a dashboard showing the status of a tender offer and how limited partners are engaging," Jon Costello, head of the PJT Park Hill Secondary Advisory Group, said in an interview.
Costello said there were "certain elements" of the traditionally manual GP-led process that could be automated. "The idea is not to boil the ocean," Eric Folkemer, head of Nasdaq Private Market said. "We're looking at what can be scaled quickly."
There was roughly $42 billion in secondary transaction volumes in the first six months of 2019, up 30% compared to a year earlier, according to a survey by Evercore, an investment bank. The amount of funds available to invest in the secondary market has decreased since the end of 2018 to $69 billion from $77 billion, though secondary buyers expect to raise $67 billion in the second half of 2019 and 2020, Evercore data showed.
"This partnership is an exciting next step for Nasdaq in our focus on delivering next generation technology to the world's capital markets," Nasdaq President and Chief Executive Adena Friedman said in a statement.