Akin Investment Management Attorneys Interviewed by PEI on GP-Led Secondaries Market

Akin investment management partners Fadi Samman, Daniel Quinn and Simon Ellis have been profiled by Private Equity International for its article “Navigation innovation in fund terms.” 

The interview dives into the secondaries market, with a focus on the rapidly evolving GP-led market highlighting new approaches to deal terms and structures. Themes and highlights from the Q&A include: 

How Deal Structures and Terms are Evolving Valuation Process 

• Fadi: “Deferred purchase price mechanisms and other similar performance-based triggers, for example, are now more often included in deal terms.” 

Fund Documentation 

• Daniel: “Documentation will now include language to make sure that the GP has all the powers required to implement the deal, including approving distributions in kind or differential treatment for selling and rolling investors.” 

Structuring Complexities in Multi-asset CV Deals 

• Simon: “Multi-asset deals will inevitably be more complex than a single-asset vehicle, particularly when there are multiple selling funds...because you’re dealing with a different investor base in each of those funds, the percentage share of the assets being sold may be different for each fund.” 

Representations/Warranties for Buyers in a CV Scenario 

• Daniel: “The increasing sophistication and complexity of the GP-led transaction market is mirrored in the insurance products that are available too. Insurers are becoming very good at crafting policies to address particular issues within the secondaries market.” 

Expectations for Investors in CV Structures and Terms 

• Simon: The secondaries buyer will generally be comfortable negotiating a document that follows the sponsor’s latest flagship fund. Flagship fund terms are intensely negotiated, so there is limited value in relitigating everything.” 

Sticking Points for Terms and Negotiations 

• Fadi: “Sticking points vary according to asset class. The perspectives of buyers in infrastructure, energy and real asset CV deals tend to be a little bit different to the traditional buyout CV.” 

The full article can be accessed here.