Our Growth in Private Company Liquidity Transactions

July 21, 2021 Angie Matturro

Shareworks’ Dramatic Growth in Liquidity Transactions

Since the beginning of 2020, the Shareworks by Morgan Stanley liquidity team helped over 24,000 shareholders realize over $7B in equity through company-sponsored transactions run on our platform. We worked with some of the best-known tech companies to run streamlined private company liquidity transactions in the same platform where they manage their shareholder equity information. As transactional activity volume increases, private companies are giving more attention to the ways that secondary transactions are structured. We are eager to share what we have learned about trends in the market in the last two years.

Secondaries Accelerated Despite the Hot Public Listing Market

Industry professionals speculated that the record public listing market would impact the volume of transactions in the private company secondary market. In fact, Shareworks has been front and center for the recent public listing surge. In the past 12 months, we have already managed more IPOs than we did in all of 2020, our previous record year.

“Fueled by a combination of SPAC, DPO, and traditional IPO’s, the current public market is unlike anything I have experienced in the past 20 years” said Jeremy Wright, Co-Head of the Global Private Markets for Morgan Stanley at Work. He added that “while the activity was mainly driven by technology and life science companies, we are having conversations with companies across a variety of sectors that are seeing impressive growth and are looking to capitalize on the current listing environment.” 

Despite the incredible surge we see in private companies conducting public listings, the Shareworks platform has managed nearly two times as much private market secondary transaction volume in the first half of 2021 than the entirety of 2020. In the first half of 2020, Shareworks managed a total volume of $1.7B. In contrast, the first half of 2021, Shareworks managed almost $2.8B.

“Our pipeline continues to look strong through the summer, driven by both record fundraising activity and multiple companies offering liquidity more than once per year” said Ryan Logue, Head of Liquidity for Global Private Markets.

Liquidity by the Numbers

The growth in private market volume at Shareworks was driven by the dramatic increase in highly valued private companies looking to provide liquidity to their shareholders. More than two thirds of the companies running liquidity transactions through Shareworks since 2020 were valued at $1B or more, and several of these companies completed more than one liquidity event in that timeframe. With the ability to handle large liquidity events, Shareworks has handled 20 transactions of $100M or more and 11 transactions where 1,000 or more participants were eligible to participate since the beginning of 2020. Coupled with these large events were a significant number of smaller events for companies valued at or below $1B.

While private market transaction activity has increased, so has geographic diversity. Activity in California remains the largest segment of the market, but we are seeing rapid growth in liquidity transactions outside of California. In 2020 and the first half of 2021, companies running liquidity events spanned across the US, and Shareworks ran liquidity events in 12 separate states. In addition, the team saw an interest in liquidity expand internationally with 15% of transactions occurring outside of the US.

Continued Growth in 2021

At Shareworks, we expect to continue to see the trend towards private market liquidity play out across the market in 2021. “As private companies look to stay competitive with their peers, and employees increasingly view liquidity as an important part of their compensation, it is hard to imagine a major pullback in the market anytime soon,” said Ryan Logue. He added that “As long as investor demand remains strong for private companies, we expect to see private companies increasingly treat liquidity as a requirement to retain employees ahead of any potential public exit event.”

Between January 2021 and June 2021, the Shareworks liquidity team ran over $2.8B in tender offer transactions, which is almost double, both in dollar volume and clients served, than the first half of 2020.

Shareworks can make managing liquidity events easy by enabling companies to initiate events, manage them effectively, and finish with certainty all within one platform. Learn how we can help you run your liquidity event.

About the Author

Angie Matturro

Angie Matturro is an Applications Marketing Lead at Shareworks by Morgan Stanley with years of dedicated experience taking complicated topics and breaking them down into easy to understand parts. She recently received her JD from Arizona State University, Sandra Day O’Connor School of Law, and is excited to help share the organization’s industry knowledge and expertise.

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