Secondary Funds

Are you looking to invest in existing venture capital funds, with a promising portfolio and available at a discount?

Secondary Funds are partnerships that invest in already established funds in order to acquire limited partner interests in private equity, venture capital or other funds.  Secondary funds enjoy a relatively shorter holding period as they obtain their stake after the primary fund has at least partially deployed its capital in the underlying portfolio companies.

Secondary funds typically acquire interests from original investors who are seeking liquidity. Sellers receive cash in return for their ownership interest in the primary fund, and are also released from any unfunded capital commitments to the fund. The sale normally happens at a discount to NAV, and the buyer also takes up future funding commitments.

Secondary funds offer potentially lower risks to the investors, as the portfolio assets are relatively mature and moreover, they can also evaluate the underlying portfolio of the primary fund before investing. Through secondary funds, investors can gain access to funds that were inaccessible when originally raised.  They provide immediate benefits of diversification, unlike a primary fund, which takes years to make investments in a number of portfolio companies.

Challenges

  • Difficultly in identifying investors looking for liquidity, and with existing ownership interests in funds with a promising portfolio
  • Understanding the true value of underlying companies and conducting sufficient due diligence
  • Negotiating with the original investors, and securing a good deal in terms of valuation

Solutions

  • Proprietary database of investors in various private equity and venture capital funds, looking for liquidity
  • Our team of professionals having immense experience in the field, negotiate the best deal – thereby providing investments in primary funds at reasonable valuations
  • Conducting extensive due diligence and preparation of valuation reports for the underlying portfolio of investments
  • Our expertise, experience and reach enable access to those funds that were initially inaccessible

Benefits

  • Help make profitable investments in promising funds at reasonable valuations
  • Access to high profile funds that were originally unavailable for investment
  • Our team provides all the required professional services and ensures financing rounds are successfully completed

Sign up as a Secondary Fund and learn more about investment opportunities that are best suited for your risk profile.