PE Auction Stars

Nomura's Mark Epley Evercore Partners' Shaun Finnie Mizuho Bank's William Getz Tudor Pickering's Maynard Holtz

UBS investment banker Nigel Dawn found himself thrust into that fray. UBS wanted to reduce its private equity holdings, valued at around $4.5 billion at their peak, according to published reports at the time. But unlike other institutions that were merely selling off portfolios, the bank wanted also to manage the downside risks.

Dawn, then with the bank's e-commerce strategic investing group, ran a limited auction but took a different tack. He set up a joint venture with HarbourVest Partners LLC that led to the sale of about 50 partnership stakes, or about two-thirds of UBS's third-party fund interests, to the Boston firm in November 2003. The $1.3 billion JV pooled assets while sharing funding obligations as well as distributions.

"It worked out well for both parties," recalls Dawn. "We achieved our objectives and executed the transaction at net asset value."

Though structured transactions are not the norm for secondary PE sales, the HarbourVest deal helped propel UBS's transition from principal investing to sell-side advisory. It was a pragmatic and, as it turned out, a providential move at a time when banks faced not only liquidity pressures but also tightening capital reserve rules.

UBS now manages what's arguably the largest secondary PE advisory business, jostling for the lead with Dallas boutique Cogent Partners. At last count Dawn's unit, launched in 2004, has advised on about $30 billion worth of transactions.

Dawn, who is in his mid-40s, cuts a tall, buttoned-up figure. He comes across as an unassuming, mild-mannered gentleman banker.

A native of Sheffield, England, Dawn spent a year in China, learning the language, during his third year at Newcastle University, where he graduated with a degree in East Asian politics. He then worked for Standard Chartered Bank plc in the U.K., Hong Kong and Beijing before earning an M.B.A. at Columbia Business School. After a stint at Booz Allen Hamilton Inc. in New York, he joined UBS in 1997 in fixed income before shifting over to direct investments.

Dawn is very low key, discretion being a prerequisite of the trade. Those who know him well say he has razor-sharp instincts for the right buyer for a particular asset. He also displays a deep knowledge of private equity firms whose portfolio holdings he sells on behalf of institutional clients.

"In 2010, we needed to create liquidity when the market was very soft," says Dominique Boies, who was Caisse de Dépôt et Placement du Québec's point person working with Dawn on two asset sales in 2010 and 2011 totaling about $1.8 billion.

In pitching for the first sale assignment, involving 11 partnership interests in PE funds, says Boies, Dawn and his team impressed him with a thorough knowledge of the assets just by relying on publicly available data.

"He blew away the competition in terms of quality," recalls Boies, now CFO of Montreal-based home renovation retailer Rona Inc. A month later, the transaction was closed. "It was a flawless execution; Nigel was very deliberate and creative in determining the best strategy," he adds.

Among other skills, Dawn can target specific buyers so efficiently by digging into assets and positioning them to the "strongest" potential buyer to maximize the sale price, says a senior secondary fund executive.

How has the market evolved? Since he started in the business, the stigma of secondaries is gone; limited partners now rely on such sales to actively manage portfolios, he says. The market is much larger and more sophisticated. Where transactions in the post-crisis period tended to be straight sales, largely of megabuyout interest, structured deals are returning, as the quality of assets declines.

"These are very interesting and very difficult to get done," he says, "and, of course, wrought with conflicts." It's the type of work that may be ad hoc to some advisers. But for Dawn and his team, he says, it's "more of a business."

Recent assignments

• New York City pension funds ($750 million of assets, January 2012)
• Government of Singapore Investment Corp. ($750 million, January 2012)
• California Public Employees' Retirement System ($800 million, 2011)
  

-- media reports