Countdown to launch: top 10 considerations in GP-led secondary deals

March 2, 2022

Reading Time : 1 min

“Countdown to launch: top 10 considerations in GP-led secondary deals,” an article by Akin Gump investment management partner Fadi Samman, senior counsel Krishna Skandakumar and counsel Amanda Butler-Jones, has been published by Reuters Legal News.

The article explains 10 key launch considerations in a GP-led secondary deal and includes some tips for buyers, sponsors and investors.

The authors begin by clarifying the term “GP-led secondary” as “liquidation transactions instigated by fund managers or sponsors…such transactions allow managers and sponsors to continue to manage an existing portfolio of assets in a newly formed vehicle—often with new investors. They are called secondary transactions because they involve trading interests in existing funds and assets…”

They write that most GP secondary transactions have three key features:

  • “Existing fund investors are offered a liquidity option with respect to one or more fund assets to either cash-out or remain invested through a new vehicle.”
  • “New investors (or ‘buyers’) inject fresh capital into a newly created fund vehicle, which will acquire the target assets from the selling fund.”
  • “The sponsor walks a ‘tightrope’ trying to balance their own interests, the interests of their existing investors and the buyers.”

The article then discusses and explains the top 10 considerations: selecting a deal type; tax structuring and diligence; conflicts, consents and amendments; pricing and valuation; status quo option; hidden costs of GP-led secondary deals; asset level diligence; buyer requirements; offering considerations (regulatory); transaction advisor.

Share This Insight

Related Services, Sectors, and Regions

© 2024 Akin Gump Strauss Hauer & Feld LLP. All rights reserved. Attorney advertising. This document is distributed for informational use only; it does not constitute legal advice and should not be used as such. Prior results do not guarantee a similar outcome. Akin is the practicing name of Akin Gump LLP, a New York limited liability partnership authorized and regulated by the Solicitors Regulation Authority under number 267321. A list of the partners is available for inspection at Eighth Floor, Ten Bishops Square, London E1 6EG. For more information about Akin Gump LLP, Akin Gump Strauss Hauer & Feld LLP and other associated entities under which the Akin Gump network operates worldwide, please see our Legal Notices page.