DC Advisory's European private equity secondaries advisory team has disbanded, the latest in a series of desk closures as LP appetite for secondary stakes contracts and pricing gaps widen. The London-based team, which advised on approximately $2.3bn in transactions over the past eighteen months, ceased operations in late January. No formal announcement was made.

The unraveling follows a 38% sequential decline in GP-led secondaries volume across Europe since Q2 2024, according to Jefferies data. Bid-ask spreads on mature fund stakes have widened to 12-17 points from single digits a year ago, freezing dealflow. DC Advisory's parent, Daiwa Securities, has not commented on whether the team was redeployed or whether headcount was reduced. Industry participants say at least three senior advisors have left the firm since December.

This is the fourth material retrenchment in European secondaries advisory this quarter. Rothschild quietly shuttered its Frankfurt-based secondaries unit in November. Lazard reduced its Paris secondaries headcount by five in December. Evercore's London secondaries group saw two departures in January, though the desk remains operational. The pattern is clear: intermediaries are pulling capacity as transaction volumes compress and fee pools shrink.

The pressure originates upstream. Limited partners, facing over-allocation to private markets after denominator effects reversed in 2023, are holding secondary sales for better pricing. General partners, meanwhile, are delaying GP-led processes because continuation vehicle terms remain unattractive relative to mark-to-model NAVs. The result is a $47bn backlog of intended secondaries volume sitting idle across Europe, per Greenhill estimates. That backlog doesn't transact until one side capitulates on price.

For DC Advisory, the timing is unfortunate but logical. The firm's European M&A volumes remain robust—$8.1bn across 34 mandates in 2024—but secondaries advisory requires dedicated infrastructure that burns cash during dry spells. Daiwa's tolerance for low-return European operations has been declining since its ¥18bn writedown on DC Advisory goodwill in fiscal 2023. The secondaries desk was a marginal contributor even in good years.

Allocators should watch three developments. First, whether Rothschild and Lazard's retrenchments are followed by similar moves at Evercore or Jefferies, which would signal structural contraction rather than firm-specific pullbacks. Second, whether GP-led pricing improves by Q2 2025, which depends on whether crossover funds and sovereign wealth funds re-enter as buyers at wider discounts. Third, whether DC Advisory's parent pursues a broader review of European operations, which could presage asset sales or further desk closures.

Daiwa's fiscal year ends March 31. Any additional European restructuring would likely be announced with year-end results in late May.