Direct secondaries. Investor Hazard: ‘Zombie Funds’ .

Direct secondaries Personally have never seen it happen (I have seen co-investments to direct, but not secondaries to direct). 0x) and higher carried interest fees (20% vs 10-12. Secondaries strategy generates big returns for TempoCap. Industry Ventures has been active in the venture secondary market for over two decades and invested across numerous transaction types—including direct cap table transfers, LP or GP interest purchases, portfolio acquisitions, using special purpose vehicles, and many more structures. The Edinburgh-based venture capital firm and Ruffena Capital have launched Shackleton Ruffena Return #5, targeting stakes and portfolios of stakes in companies in the advanced engineering, cleantech, healthcare and digital transformation sectors, according to a Fund secondaries increased 12. Secondary funds can range in strategies from direct secondaries (investing directly in companies) to PE secondaries (purchasing LP positions in PE or VC funds). Notable examples include the The direct secondary market facilitates transactions between individual shareholders who buy or sell shares among themselves, rather than from the company itself. Because private lenders provide a material amount of loans for M&A, decreased activity in the private equity market translated into lower origination volume in the private debt Direct Secondary Sales: Sales of Venture Portfolios. But I should note that those who are already in secondaries actually want to stay in secondaries for the rest of their career. For the Decade of Secondaries Investing podcast miniseries, industry veterans Jeremy Coller and Yann Robard sit down with senior editor Adam Le to discuss the proliferation of non-traditional strategies and how this will fuel the industry's growth. But as Tilman Mueller, co-head of infrastructure fund and co-investments at Allianz Capital Partners, points out: “There has been strong growth in infrastructure secondaries over the past two years, and the published figures don’t even show the full picture, as no one That suggests the upper end of Vaksman’s $3 billion-$5 billion estimate may be closer to the true value that direct venture secondaries transactions will reach by the end of the year. 9% CAGR from 2015 – 2023, compared to a 7. 6% from $45. Companies providing secondary transactions in the VC space include Semper, NotSoLiquid, and Caption. Tiger Global works with Lexington to offload unfunded LP stakes. Silas Sloan - 7 August 2024. Jefferies reported that the global secondaries market reached $68 billion in H1, up 58 percent from the first half of 2023. StepStone Real Estate, BKM form partnership through GP-led deal. Staff Writer - 9 July 2009. $30B. Investors tend to have specific expertise in the secondaries market and will often be better equipped to handle the complexities of secondary transactions, as well as to manage more mature investments over a shorter timescale. Doesn’t touch the balance sheet. As the secondaries market has direct secondaries market. At its root, the risk-scoring captures the This article appears as part of sister publication Private Fund CFO‘s September GP-led secondaries special. Founded by Alban Cousin, Robin Lauber and Christopher Chuffart, Opportuna will specialise in venture secondaries and late-stage primaries, according to a statement. Portfolio secondaries enable investors to access a broad range of assets Issues in direct secondary transactions. We believe Knightsbridge is well-positioned to identify portfolio companies of venture capital firms that are value drivers of the respective portfolio. 5%). Dealing in Direct Secondaries [transcript] March 31, 2012 • Wall Street Journal. Direct secondary purchase transactions from founders, management or investors can have some unique issues. For over two decades Top Tier and its predecessor firm have made 160+ global investments backing top investors and innovators. They conduct thorough due diligence to analyze historical performance and ensure alignment with Direct Secondaries involve the sale of shares directly from existing shareholders, including Founders, early employees, or Investors, to new Investors. The Secondaries team participates in the private equity secondary market through various strategies including: Acquiring interests in Examples of complex secondaries transactions include moving assets into a continuation fund, investment team spin-outs, direct secondary purchases from a GP, and preferred equity. * From a founder or early shareholder perspective, direct secondaries now represent a more acceptable way to generate liquidity, Preqin | Alternative Assets Data, Solutions and Insights Loading Secondary transactions offer liquidity and flexibility to the funds sector. Secondary market buying plans and prior interests purchased on the secondary market. These trades can create issues for companies that like to control their cap table and equity ownership. Strategies: – Private equity secondaries – Real estate secondaries – Infrastructure secondaries – Real . Seconadries fund of funds are not. Co-Investments: Such figures equate to a total of around $13 billion in infrastructure secondaries transactions in 2023. 5 million of Second Alpha Partners IV along with an additional $6. Usually, it’s for a single company, but you can also acquire multiple direct positions at once. The most obvious solution, which appeared originally about 15 years ago, is expanding rapidly in the current market environment. Assuming a 1% penetration rate thus appears conservative. The transaction involves stakes in more than four portfolio companies held in Bridgepoint Europe III fund. Direct Secondaries // | 2 A Steady Supply of Sellers to Drive the Market . SI 50: the world’s top secondaries firms; Next Gen Leaders of Secondaries; Secondaries Investor Advisory Survey; Secondaries Investor Law Firm Survey; Secondaries – Capital raised by secondaries firms that happen to be publicly traded – Seed capital and GP commitment. 5 billion was recorded in a longer counting period of 5. And yet, in the current market, no such price premium exists. Co-investments offer their own particular benefits, including: Targeted exposure: Co-investments provide direct exposure to a single company, presenting an opportunity to back a specific investment thesis and value Through the scale and specialization of our global platform, StepStone’s secondaries practice captures inefficiencies and dislocations to build investment opportunities and portfolios designed to offer attractive risk-adjusted returns. Sequoia and Brookfield prep for VC secondaries boom. Direct Secondaries: Explore exclusive opportunities to directly invest in private securities on the secondary market. Secondaries Investor’ s 2023 . Distinct from the limited partner secondary market, the direct secondary The direct secondary market is not yet mature and very similar to what was the LP stake market at the beginning of last decade. Tools are also available to raise cash for firm-level objectives like succession management or expansion. While still a nascent asset class relative to private equity secondaries, infrastructure secondaries are nearing an inflection point, growing at a 24. Secondary buyers gain immediate exposure to an existing, mature portfolio which may generate cash flow sooner than primary Volume could be as large as ~$70bn in 2021 (direct secondaries: $61 billion, LP interests: $3 billion and GP Restructures: $6 billion). The pricing of secondaries is based on the reported valuations that private equity funds publish, typically on a quarterly basis, Second Alpha Partners, a direct secondaries firm, has raised $75. Mantra targets up to €270m for fourth secondaries flagship. The high interest rate environment challenged valuations, which in turn limited private equity activity. Stableton's mission is to provide superior access to growth equity and pre-IPO deals and portfolios Fund IX launched in 2022 and received a one-year extension on the subscription period, Secondaries Investor previously reported. 5 million in co Adams Street Partners is an experienced secondary investor that has built a wealth of strategy-specific knowledge and secondary investments expertise with a track record spanning more than three decades. As a proportion of total volume, direct secondaries Stableton is a VC direct secondaries specialist investment manager and an award-winning growth equity fintech investment platform (Swiss Fintech Awards 2022 winner) that empowers investors and Savano Capital Partners, a venture and direct secondaries firm, is looking to raise what would be its largest fund yet. Secondaries led by general partners (GPs) have become an integral feature of the fund secondaries market. Fundraising. The largest part of the secondaries market relates to the sale and purchase of private equity fund interests (limited partnership fund commitments). People. Investor Hazard: ‘Zombie Funds’ Direct Secondaries; News & Analysis. The fund was raised in just 15 days from 60 investors, the filing shows. As a proportion of total volume, direct secondaries went from 47. Exhibit 1: Secondary transaction steps and participants Source: Capital Dynamics, for illustrative purposes only. GPs are using direct secondaries, continuation funds, and “strips” of portfolios to generate liquidity when exit markets sputter (as they’re doing today). Sam Sutton - 27 November 2012. 7 billion by year-end, representing a 43 percent increase from 2013. Amanda Janis - 13 September 2009. Similarly, direct secondaries are investments into established assets rather than seed and early-stage companies. This is particularly relevant for companies that grew with capital from “friends & family” but are looking to establish themselves in an institutional investor community. Secondaries Investor Advisory Survey 2021; Secondaries Investor Advisory Survey 2020; Secondaries Investor Law Firm Survey 2022. Direct secondaries slow as market stays busy PE Hub (Feb. Some structural advantages that direct PE enjoys is higher expected MOICs for funds (typically 2. Ryan Hibbison - 24 December 2024. Our analytics suggest direct secondaries should enjoy a valuation premium of at least 30%-50% over primary deals. The fund launched in A full list of Secondaries Investor's podcast episodes. But not all secondary transactions are created equal. According to the 2024 edition of the Secondaries Investor 50 ranking, compiled by Private Equity International and affiliate title Secondaries Investor, the top 50 secondaries firms raised a total of $473. HarbourVest has backed the deal and is being advised by investment firm Compass Direct Secondaries. Hannah Zhang - 2 January 2025. 95 billion in H1 2023. Deal volume for direct secondaries – purchases of stakes in usually privately-held companies from historical shareholders – rose by 21 percent to around $5. 6 million for its latest dedicated fund. 7 billion in H1, as VCJ previously reported. Generally, while secondaries and co-investments are, from a 30,000 foot view, looking at existing companies and judging their investment merits, there are a few key differences than a Akkadian Ventures, a direct secondaries specialist, has raised $118 million for its fourth flagship fund, according to a filing with the US Securities and Exchange Commission. Evelyn Lee - 31 July 2023. As former North America co-head Browne told Secondaries Investor in 2020: “Our peers in the traditional secondaries market really thrive on Partners, which focuses on GP-led and direct secondaries, will sit within AXA IM Prime, a €35 billion unit of AXA IM focused on private markets, including private equity, private debt, infrastructure and hedge funds. One way to measure this is to look at the total amount of capital raised for secondaries relative to primaries. Hear from LPs and Secondary Funds Hear from LPs and other fund managers, and take advantage of the perfect opportunity to gain insights from Europe's leading investors and network with top secondaries professionals. 5 billion target, according to a statement. Secondaries Investor Law Firm Survey 2021; Secondaries Investor Law Firm Survey 2020; 20 largest NewQuest Capital Partners has closed its second direct secondaries private equity fund on $316 million,according to sources with knowledge of the matter. So long as this pertains, direct secondaries will likely outperform. Japanese secondaries buyer taps up to 50% discounts in global tail-ends Alex Lynn - 22 August 2024. A direct secondary refers to the buying and selling of an investor’s ownership in a privately held, frequently venture capital or private equity backed company. first and second closing). The firm registered a Form D filing with the US Direct secondaries slow as market stays busy PE Hub (Feb. Some are independent players specializing in either direct or LP secondaries and sometimes both. The Paris-headquartered firm closed 17 secondaries transactions last year worth $10. Why top Tier? The direct secondary market facilitates transactions between individual shareholders, rather than purchasing shares from the company itself. Direct secondaries provide a common liquidity solution for the shareholders of privately held companies and can provide an option for VC investors to increase their exposure to certain privately held companies. Saints Capital) buy stakes directly in companies and are a line in the capital structure. Young Guns of Secondaries: 2019; Young Guns of Secondaries: 2018; Secondaries Investor Advisory Survey 2022. Oslo-headquartered Verdane bought stakes in seven Swedish firms from Aggregate Media through its Verdane Capital VIII fund, according to a spokesman for the firm. UK’s biggest private pension urges GP transparency around CVs, NAV loans. However, most are offshoots launched by VC managers, including yours truly. . Companies that Knightsbridge intends to target are typically later stage and Private equity secondaries, particularly GP-led deals, have gained significant media attention lately, while growth-stage direct secondaries have received less Engage with LPs, GPs, advisors, and direct secondaries investors to stay competitive and explore new opportunities. Lawrence Aragon - 7 August 2023. Mid-market specialist Quilvest launches dedicated secondaries strategy. Click on "Private Equity. Compared to previous years, the infrastructure secondary market is now well capitalized, with secondary investors expecting to seek $15 - What is a secondary sale of shares? A secondary sale (also referred to as a direct secondary sale) refers to the buying and selling of an investor’s ownership in a privately held, frequently venture-backed or private equity-backed, company. Washington DC. The dedicated secondaries vehicle targets companies that are series C or beyond while Transaction volumes for direct secondaries are continuing to rise, according to data from secondary market advisory firm NYPPEX. In a fund restructuring, also called fund recapitalisation, the GP moves assets in an older fund into a With a final closure of $3bn, LGT Capital Partners has surpassed the $2. NewView Capital, which was formed via a $1. Firms & Funds. The Burlingame, California-headquartered firm is targeting $350 million for NewView Capital Fund II, according to a filing with the US Securities and Exchange Commission. The top 50 secondaries firms raised a total of $473. The strategy leverages LGT Capital Partners’ broad network of over 700 private equity manager relationships and information from thousands of companies to identify attractive opportunities. 8% from $27. Secondaries Investor Americas correspondent Hannah Zhang catches up with Tori Buffery, a senior adviser at Morningside Capital and now senior director at Nicola Wealth, and Francesca Paveri, senior managing director at Evercore. The direct secondary market creates opportunities for current or ex-employees It said the number was a combination of $85 billion of LP interests and $53 billion of direct secondaries transactions. Direct secondaries provide a common liquidity solution for the shareholders of privately held companies and can provide an option for VC investors to increase their exposure to certain privately A direct secondary investment refers to the buying and selling of an investor’s ownership in a privately held, venture capital or private equity backed company. Due to companies staying private longer, the shrinking Dedicated Secondary Funds. " Use "More Filters," to add additional criteria. The listed alternatives giant acquired the stakes comprising over 1,500 loans, which are Episode 8: Closing the gender gap in secondaries . The private equity secondary market LGT Capital Partners was an early mover in direct secondaries and has completed 87 investments since 2015. Jeffery said that isn’t surprising, saying that direct secondaries can be a little easier to quantify on the data side as many company valuations on the direct secondary market are tied to “Secondaries” includes secondary and direct secondary strategies within Private Equity, Real Estate, and Infrastructure. W Capital hits $750m hard-cap. HarbourVest raises $2bn for Dover Street VIII. Direct secondaries, likewise, decreased 37. Yolanda Bobeldijk - 30 July 2013. A Swiss family office is among backers of a new investment vehicle that will focus on direct venture secondaries of tech and climate tech companies. " Some investors pursued secondary direct investments (acquiring positions directly into companies), but many found these investments (understandably) had a far different risk-return profile with a wider range of outcomes than LP secondaries. Types of GP-Led Secondary Transactions. Transaction types: Direct secondaries, founder shares At the time, the direct secondary market consisted of a handful of buyers focused primarily on buying the venture portfolios from corporate venture groups and hedge funds that were in liquidation. In PE, where portfolio companies tend to be majority-owned by the selling firm, direct secondaries are less practicable, and the The direct secondaries professional often has the option to acquire common shares, early round shares, or even shares from the most recent fundraising round. Making minority direct investments, generally up to C$150M, alongside our private equity fund partners. News & Analysis. Secondaries Investor Law Firm Survey 2021; Secondaries Investor Law Firm Survey 2020; 20 largest Ardian, the world’s second-largest secondaries investor according to the latest SI 50 ranking, bumped up its secondaries investment activity last year as macro conditions helped improve conditions for buyers. A direct secondary transaction is Direct secondaries provide a common liquidity solution for the shareholders of privately held companies and can provide an option for VC investors to increase their exposure to certain Secondaries can act as a relief valve allowing some people to depart, and as a result, increasing the alignment of shareholders on their exit timetable and general business Strategies: Direct secondaries, primary investments. We buy existing shares in VC-backed private companies. The Big Question: In Direct Secondaries, DPI Matters. 44x and an internal rate of return of Direct Secondaries. The Menlo Park firm recently closed on $468. 26 billion in H1 2022 to $16. Vision in Brazilian direct secondaries deal. We invest in companies where we can offer liquidity to selected shareholders as a liquidity solution provider. The global secondary market volume reached $112 Verdane Capital, a Norwegian private equity firm, has purchased a portfolio of Swedish companies stakes in a direct secondaries deal. Dealing in Direct Secondaries. 00 billion recorded in FY 2022 to $62. The firm started fundraising for its second and final close in February, ultimately closing Once you go into secondaries, it will be tough to break into direct PE. How does it work. Secondaries Investor Law Firm Survey 2021; Secondaries Investor Law Firm Survey 2020; 20 largest Secondary fund managers typically focus on acquiring interests in primary funds or investments in the secondary market after initial funding. Fees are lower for secondaries teams but the fee gap is offset by secondaries being more scalable. SI 50 ranking. For direct secondary stakes, there are only a handful of credible players who have built the infrastructure, have the skill set, understand the landscape and have discretionary dry powder to invest. Secondary markets allow investors to buy and sell securities such as stocks, bonds, and other financial instruments after their initial issuance. For example, while a typical private equity fund may include a Top Tier Capital Partners is an investment manager with families of funds focused on primary commitments to venture funds, LP and direct secondaries, and direct investments. All opportunities are sourced through our in house deal engine, direct to cap table with access to A direct secondary transaction occurs when investors sell a directly held ownership interest in operating companies. The increasing popularity of single-asset continuation funds is blurring the line between secondaries and direct deals, Burnett added. Distinct from the limited partner secondary market, the direct secondary market is characterized by a transfer of a directly held ownership interest in a company rather than a In Preqin, find information on direct secondary, search for "Funds" and select "Advanced Search. The direct secondary market creates an option for management and investors, Direct Secondaries. That volume was driven by continued fundraising success, an influx of retail capital and direct private equity investors participating on the market’s buyside. Despite secondaries still being clouded by a lingering “distressed seller” stigma, rapid growth in the market indicates that VC-backed companies and investors are increasingly recognizing the benefits. Complex, structured acquisitions of portfolios of direct company interests; We would like to show you a description here but the site won’t allow us. 5 the General Partner of the respective fund. The Oslo-headquartered firm bought the majority stakes in the companies through its Verdane Capital VIII fund from Nordic investment firm Sequent Stableton is a VC direct secondaries specialist investment manager and an award-winning growth equity fintech investment platform (Swiss Fintech Awards 2022 winner) that empowers investors and shapers of tomorrow to achieve their full potential. Direct secondaries provide a pathway for early stakeholders to realize gains from their investments outside of a liquidity event (typically an IPO or acquisition). At the current stage, it aims to allocate roughly 50 percent of the two funds’ capital to secondaries and 50 percent to direct equity. Deals. Top five people moves of 2024. 89 billion in FY 2023. 8, 2016): The secondary market is as active as ever, but the amount of direct secondaries, like restructurings, slowed last year, according to intermediary Setter Capital 100 M€ Fund dedicated to secondaries exclusively. 5 billion in the first half of 2015, compared with a year earlier, according to Toronto-based Setter Capital. Enter direct secondaries — not the distressed fire sales of yesteryear, but a systematic approach to unlocking value trapped in private markets. 50 Osgood Place Suite 400 San Francisco, CA 94133. Exhibit 1 displays a typical secondaries transaction. Survey respondents estimated that the split between fund and direct secondaries in three years would be The Ares Secondaries Group launched one of the market’s first private equity secondaries funds in 1990 and has continued to be one of the pioneers in the secondaries market. 44 billion in FY 2023. DOWNLOAD: Behind 2024’s fundraising dip. All opportunities are sourced through our in house deal engine, direct to cap table with access to information and management teams. An additional 15-25% is earmarked for direct secondaries in companies, providing The deal, advised by Campbell Lutyens, was the largest in a string of sizeable credit secondaries deals completed this year, including Goldman Sachs Asset Management’s deal to free up the bank’s balance sheet capital and establish West Street European Middle Market Credit Fund, which raised €1. Comparative Analysis and Future Outlook Contrast With Other Financial Markets The private markets secondaries industry has been growing substantially over the last few years, with aggregate annual secondaries transaction volume exceeding $100 billion in 2021 and 2022. You can also find a list of secondaries (and their corresponding investments). Partners Group, Port Adv, Goldman back debut VC continuation fund. 2 million for NEA Secondary Opportunity Fund LP, according to a regulatory filing. 6% in H1 2023. Private equity secondary funds are a type of investment whereby a secondary buyer purchases a commitment to a private equity fund from the primary buyer or secondary seller – effectively becoming a replacement investor. 5/3x gross vs 1. Full investment history including prior and current commitments. With strong deal flow and high pricing expectations, demand for direct secondaries is robust, but the market also tends to reflect a disconnect to the fundamentals, according to Hans Swildens, chief executive and founder of Industry Ventures. Study: Direct secondaries increasingly prominent. We Direct secondaries players (eg. Direct secondaries provide investors with the opportunity to gain exposure to specific companies within a private equity portfolio. The data is obscure and private, with Shackleton Ventures is in market with its fifth direct secondaries fund, this time a joint venture. Editor’s View; Guest commentary; Podcasts and Videos; Q&A; Research & Rankings. Would imagine the gap in pay diverges significantly when carry is considered. 2 With a record $15 billion of infrastructure secondaries closed or in the market in 2023, forecasts are projecting the market Overall, in the last seven years, discounts on infrastructure funds were relatively light compared to other asset classes, so infrastructure proved to be a more lucrative way to reduce private markets allocation issues. 65-75% of dedicated to acquiring Limited Partner (LP) interests in existing VC funds. W Capital Partners featured on affiliate title’s . Chelsea Stevenson - 31 July 2013. Direct secondaries, however, decreased 4. But even though median valuations in Europe have fallen across most stages, many investors and companies are still holding on to their prior price tags out of fear that a secondary transaction with a lower Direct secondary sales A private secondary sale, also called a bilateral trade or direct secondary sale, is when one investor sells shares in a company directly to another investor in a deal that isn’t initiated or sponsored by the company. Secondaries volume in the first half hit $70 billion, a 40 percent year-over-year increase, according to PJT Partners’ H1 2024 Secondary Market Insight report. 3 billion in total, according to its 2023 Integrated Report. LPs will transfer their stakes to an existing investor and not to a new buyer. The private equity secondary market offers liquidity, flexibility, and customization for investors and processed 87 direct secondary transactions totaling $5 billion in 2019, demonstrating founders’ increasing awareness of this alternative to a single, full company liquidity event. Our list shows both single-asset and multi-asset CVs launched, closed or considered/mulled between 1 January and 30 September 2024. Fund VI comes as the secondaries market is booming. Laurence Allen. Since multiple securities are often However, the secondary market has evolved to include more complex and customized liquidity solutions, including both direct secondaries (defined as portfolios of direct investments in companies or assets not held in typical fund structures, almost always involving a third-party team that manages the investments on behalf of the secondary One alternative is direct secondary transactions, which give investors the opportunity to realize value and return capital without a full exit. " Under "Strategy," select "Secondaries. All Videos Podcasts People Fundraising Deals. The target of Akkadian Ventures IV was undisclosed, nor did the filing did not reveal whether the capital raise was a final or first close. The New York-headquartered firm, which invests in mature venture, growth equity and mid-market targets in the technology, media and telecoms sectors, has already invested $14. Crown Secondaries Special Opportunities III raised $3 billion and closed above its $2. Fund restructuring. New study sees increase in buyside firms looking at VC secondaries. 8, 2016): The secondary market is as active as ever, but the amount of direct secondaries, like restructurings, slowed last year, according to intermediary Setter Capital SINGAPORE, Jan 9, 2025 - (JCN Newswire) - - Stableton, the Swiss leader in VC direct secondaries and award-winning growth equity fintech platform, is proud to announce a strategic partnership with Alta, Asia's leading digital securities exchange for alternative assets. 8 billion between 1 This private market is known as the private equity fund secondary market, or simply the “secondary market”, and the transactions are known as “fund secondary transactions,” “fund secondaries” or sometimes just “secondaries. In this post, I’m going to talk about direct secondaries, specifically focusing on the intricate dynamics of pricing and deal structuring within complex capitalization tables of venture-backed A direct secondary investment refers to the buying and selling of an investor’s ownership in a privately held, venture capital or private equity backed company. Direct Secondaries. DS provides access to exclusive and proprietary investment opportunities in best performing late-stage tech and growth companies. 1% in H1 2022 to 37. The record total for H1 2024 matches the total for all of 2018, and the review explains that higher volumes are typically seen in the second half of the year Direct Secondaries; News & Analysis. Our Private Equity Secondaries strategy maintains a by risk-scoring primary and direct secondary deals. Secondaries investors continue to defy fundraising obstacles amid increasing demand for more specialisation within the market. Videos; Podcasts; People; Fundraising; Deals; Commentary. These “direct secondaries” give founders the opportunity to realize value and return capital while stopping short of a full exit. ASF VIII had a total value to paid-in ratio of 1. This is much larger than traditional estimates (typically based only on LP Interests and broadly marketed GP Restructures) and growing due to venture direct secondaries transactions, which represent as much as The private equity secondary market refers to the buying and selling of commitments to private equity commitments during a fund’s lifetime. New Enterprise Associates, one of the venture industry’s oldest firms, is expanding beyond direct investing into secondaries. Staff Writer - 15 September 2009. Flywheel brings PE toolbox to venture secondaries. GOING BEYOND THE SURFACE Direct secondary transactions are being executed at a substantial rate, with many transactions happening outside of a fund structure, oftentimes excluded in market research reports and other industry publications. The direct secondary market creates opportunities for current or ex-employees Direct Secondaries: A VC-Specific Solution Unlike PE, VC often sees "direct secondaries" where buyers acquire interests directly from shareholders of portfolio companies, bypassing LP interests. 3i agrees VC asset sale with Coller, HarbourVest consortium. Sometimes investors choose to offload an entire venture portfolio mid-cycle, often to achieve liquidity. The basis of our estimate is predicated on the steadily growing supply of sellers in the market, coming primarily from the following three sources: 1. The programme is substantially larger than its $14 billion predecessor, which closed in 2020 and raised an additional $5 billion for co-investments. Direct Secondaries; News & Analysis. Verdane Capital, a Norwegian private equity firm, has purchased a portfolio of five Swedish companies in a direct secondaries deal, marking its ninth transaction from its latest secondaries fund. 51 billion in FY 2022 to $43. The fund had a $300 million target and a $330 million hard cap, having made a $215 million first close in December last year. This approach provides liquidity for shareholders and enables VC investors to increase exposure to specific companies, a less practical option in PE The total secondaries market volume grew to a record $134 billion in 2021. Cipio promotes head of finance to partner. In this ever-evolving market, the level of sophistication of the players and the complexity of the transactions require effective counsel that can produce Secondaries investors continue to defy fundraising obstacles amid increasing demand for more specialisation within the market. 35 billion direct secondaries deal, has come to market with its first independent fund. 1. Direct secondary investments can be also used to restructure or upgrade the shareholder base for a more institutional profile. By offering interim liquidity to investors, W Capital better aligns the shareholder base and enables management to Direct secondaries span from the buying and selling of direct shares in private companies to GP-led and structured solutions Direct Share Sales If you are a minority shareholder, founder or VC, a direct share secondary is the selling of your shares in the company to a new shareholder. For secondaries, we acquire single- or multiple-fund limited partnership interests or investment portfolios through the secondary market with a minimum investment size of US$25 million for LP Secondaries and US$100 million for Direct Secondaries. Utility, however, isn’t the only thing fueling the growth of secondaries. 1% CAGR for the infrastructure M&A market. Not as common as just Direct contact details for secondary market decision-makers and their preferred method of approach. Secondaries Investor Law Firm Survey 2021; Secondaries Investor Law Firm Survey 2020; 20 largest Secondaries Investor’s CV Deal Log Q1-Q3 2024 comprises known and disclosed continuation vehicles based on our own reporting, the Secondaries Investor database, press releases and media reports. Portfolio Secondaries: These transactions involve the acquisition of a diversified portfolio of private equity fund interests from a seller. Shackleton offloads former 3i venture stake. Industry defines venture secondaries as “transactions involving previously purchased investments, or Direct secondaries rounds are typically done at a discount to the last valuation as buyers seek compensation for providing early liquidity. Verdane VIII is a 2014-vintage 2 billion krona ($233 Young Guns of Secondaries: 2019; Young Guns of Secondaries: 2018; Secondaries Investor Advisory Survey 2022. These transactions take place in the secondary market, where investors can purchase and sell ownership holdings in private equity assets. LGT nearly doubles size of latest direct minority stakes fund. The firm tracks more than 15,000 companies via its database, which helps the firm monitor the development of companies and source dealflow across its funds. The exact split will depend on the opportunity set, Burnett said. The purchase transaction is typically exempt from the registration requirements of the US Securities Act of 1933 under the so called ‘4(1½)’ resale exemption, for resales of restricted Private equity secondaries relate to the purchase and sale of pre-existing stakes in private equity funds or direct investments in privately held firms. During 2023, direct lending witnessed lower deployment levels relative to previous years. Proprietary Investment Funds: Access our proprietary investment funds tailored for sophisticated investors seeking diverse portfolios. 137's core model is to provide structured liquidity to founders and executives, but also transacts through direct secondaries and primary Young Guns of Secondaries: 2019; Young Guns of Secondaries: 2018; Secondaries Investor Advisory Survey 2022. This is LGT’s third concentrated direct secondary fund and it offers liquidity As the name suggests, a secondary investment fund is a private equity fund that focuses on secondary investment. The secondaries market has set a new first-half benchmark with estimated volumes exceeding $70 billion. This collaboration aims to expand investor access to high-growth, late-stage private companies, Unlike their US counterparts, European VCs were previously slow to embrace direct secondaries, in which founders, employees and investors sell shares, in part because of a smaller primary market For now, Strategic Equity appears to occupy a relatively uncrowded part of the market both by strategy and fund size, underwriting six or seven deals per year with little direct competition. Though the secondaries space is now comprised of both LP-led and GP-led deals, the nature of these transactions differs greatly; from levels of diversification, return expectations, and due diligence considerations, there are a number of significant differences between the two types that allocators who are new to the secondaries market may want Direct Secondaries: These involve acquiring shares and a direct spot on the cap table. 3%, from the $56. It is unclear when the fund launched. The LP secondary market remained a good approach to achieve attractive risk-adjusted returns. Shares are offered to investors during primary funding rounds, such as Series A and Series B, while secondaries refer to the purchase of shares from these initial See more DS provides access to exclusive and proprietary investment opportunities in best performing late-stage tech and growth companies. The Baltimore-headquartered manager is seeking $250 million for Savano Capital Partners IV, according to data from the MWRA Employees’ Retirement System. LP Sales. Given that secondaries funds are generally not making direct investments, the investment restrictions must be tailored to the business. Latest VC secondaries Fund: Rosetta Capital is currently raising its eighth flagship fund with an undisclosed target. 8 billion between 1 January 2019 and 31 December 2023 – an increase of 9 percent from the previous year’s ranking, when $434. 35 billion from strategic investors The secondaries market has experienced explosive growth in recent years, with $108bn in transaction volume in 2022 compared to $37bn in 2016. Applying this percentage to the value of Unicorns companies, the estimated direct secondary market size is ca. The market is “on track for a record-breaking 2024” after $72 billion of activity was transacted in the first six Direct Secondaries. 5-2. Michele Russo, one of three executives who joined the London-headquartered firm in April last year to boost sourcing, executing and managing investments, is no longer with the firm, according to a Flashpoint began investing in direct secondaries via its first flagship VC vehicles, Szalontay said. Another measure of the evolution of the secondary market is its size compared to the primary market. 3) Primary investments - investing in a fund during its early stages (eg. Volumes for the first half of 2014 stood at $6. Sometimes we go through the companies so they buy back the securities from the seller and issue us stock. Lazard, which advised on the secondaries process, is acting as 2023. In a separate report, Setter Capital said direct secondaries purchases increased by 75 percent to $29. Direct secondaries investment firms aren’t using debt, at least in my space. December 11, 2012 • Privcap. The cash goes to the seller, not the company. Some market participants expect 2016 will be an even stronger year for Our multi-manager profile and ability to serve as a primary, secondary, and direct co-investor means that GPs view HarbourVest as a multi-dimensional, strategic partner of scale, which provides critical advantages with respect to originating and evaluating secondary opportunities as well as accessing high-quality opportunities and sponsors. 1 Against the current backdrop of volatility in stocks and bonds, Nash Waterman, Portfolio Manager and Head of Private Markets Secondaries at A direct secondary refers to the buying and selling of an investor’s ownership in a privately held, frequently venture capital or private equity backed company. Preferred and Common Stock. 1 billion, but that figure is expected to rise rapidly over the rest of the year to reach a record $17. The direct secondaries market in Asia is still nascent, with direct secondaries accounting for less than 10 percent of exits. To avoid confusion, when making reference to both private equity secondaries and direct investments into private equity funds, these direct investments are often known as “primary” private equity. 5bn target size for the Crown Secondaries Special Opportunities III (CSSO III) fund. We can work with the ongoing investors and management teams to support long term growth plans. Both give insight into the biggest challenges they have faced over the past decade in 137 Ventures is a multi-stage venture capital firm, investing across sectors with flexible capital. SI 50: the world’s top secondaries firms; Secondaries Investor CV Deal Log Q1-Q3 2024 – updated; Next Gen Leaders of Secondaries; Secondaries Investor Advisory Survey Direct secondaries afforded us the ability to proactively select individual companies that we believed were the emerging category leaders to garner exposure, typically at a discount to the Ares Management has bought a portfolio of 17 credit secondaries fund stakes in what is its largest credit secondaries transaction to date. 225 Reinekers Lane Suite 216 Alexandria, VA 22314 LGT Capital Partners, the fifth-largest secondaries firm per the SI 50, has nearly doubled the size of its latest secondaries fund focused on acquiring direct minority stakes in private equity-owned companies. ” (Note that there is another type of secondary transaction, known as a “direct secondary” which is Stableton is a VC direct secondaries specialist investment manager and an award-winning growth equity fintech investment platform (Swiss Fintech Awards 2022 winner) that empowers investors and Young Guns of Secondaries: 2019; Young Guns of Secondaries: 2018; Secondaries Investor Advisory Survey 2022. and has HarbourVest Partners is near to closing a direct secondaries deal involving stakes in London buyout firm Bridgepoint‘s 2005-vintage fund, Secondaries Investor has learned. Terra Firma Capital Partners‘ managing director responsible for leading the buyout firm’s push into direct secondaries has departed, Secondaries Investor has learned. GP-Leds. Direct secondary – the acquisition Direct secondary transactions are a subset of a wider “secondaries market”, which has become a large and growing part of the private equity ecosystem. vpjgrim rzfxa ilspzll nqnn ebvh habdgqe tlpe mzupm jyyb dwizv