INVESTMENT STRATEGIES
Secondaries
Secondaries involve buying existing interests in private funds or portfolios. The analysis begins with assets already held and the rights, obligations and future cash flows attached to those interests.
Overview
A new entry point into existing investments.
A transaction may arise when an investor seeks liquidity or when a fund manager proposes a new ownership arrangement for existing assets. An established portfolio can provide information about its holdings, but that information may still be incomplete or dated. Purchase price needs to be assessed alongside remaining commitments and the uncertainty of future distributions.
Investment focus
Investor-led transactions
Acquisitions of fund interests from existing investors seeking to adjust their portfolios or obtain liquidity.
Manager-led transactions
Transactions initiated by a fund manager, including continuation structures that hold selected existing assets.
Portfolio acquisitions
Purchases spanning multiple interests or assets, with attention to concentration, documentation and transfer conditions.
Capital structure
Transfers of limited partnership interests, continuation vehicles and negotiated portfolio acquisitions. The buyer may assume unfunded commitments as well as exposure to existing assets.
Evaluation
Underlying value
Review the operating performance, valuation basis and concentration of the assets beneath the fund interest.
Cash-flow obligations
Assess expected capital calls, distributions and the consequences of holding assets for longer than planned.
Alignment & conflicts
Examine transaction incentives, pricing procedures, consent requirements and the rights of participating investors.
Risks to consider
Reported valuations may not reflect realizable prices. Distributions can be delayed and capital calls may exceed expectations. Concentrated holdings, transfer restrictions and transaction conflicts can affect outcomes. Buying at a discount to reported value does not establish a margin of safety.
What is being acquired after all remaining commitments and transaction terms are considered?
These considerations are illustrative and not exhaustive. Evaluate any actual investment using its own documents, terms and risk disclosures.
Related strategies
This profile explains the investment discipline and potential structures. It does not constitute an offering of a particular fund or investment product.