Davis Polk partner and Investment Management practice head Leor Landa discussed the secondaries market with the Wall Street Journal. In the Q&A, Leor shares his thoughts on market activity over the last year as well as what to expect in the year ahead.

“In the first five months of [2023], activity levels were lower, the pace of deals was slower and the likelihood of deals going bust was higher. By May or so, we began to see the trend reverse as pricing stabilized. In the earlier part of the year, we were working on deals that featured price deferrals and preferred equity – deals were getting complicated to try and close that valuation gap. As pricing has tightened up, you don’t have to do that as much,” Leor explained.  

When asked what he thinks will be the biggest challenges facing the secondaries market in 2024, Leor said, “It’s likely we’ll see more regulatory enforcement activity around continuation vehicles. Clearly if [the Securities and Exchange Commission] is on exam and they see there is a CV, they dig in and they have made it clear through their rule making what they see as the pluses and minuses of the market.”

“Secondary Investors Bank on Pricing Gaps Closing This Year,” Wall Street Journal (January 12, 2024) (subscription required) 

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