The Private Equity Secondary Market | 2017
The Private Equity Secondary Market
Copyright © 2017 Coller Capital Limited / Strictly Private and Confidential
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2017 | The Private Equity Secondary Market
Disclaimer
This document has been prepared by Coller Capital Limited (“CCL”) and its affiliates (together, “Coller Capital”) for the sole purpose of providing
general information about the secondaries market; Coller Capital and transactions in which Coller Capital has been involved. It has not been
prepared with regard to the circumstances or objectives of any particular person, or the suitability of a particular transaction or investment for any
person, and no advisory or other relationship is created by this document or any related communication.
CCL does not provide investment advice or any other investment services to any person unrelated to Coller Capital, and CCL’s only clients are the
managers of Coller Funds. Coller Capital is not responsible to any other person for providing protections that would be afforded to clients or for
advising any such person on any transaction or investment. Nothing in this document should be construed as investment, legal or tax advice.
This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe
for, any investment and should not form the basis for entering into any transaction.
While Coller Capital seeks to develop or obtain information contained in this document (“Information”) in a manner that it believes to be reliable,
it makes no representation and accepts no liability or responsibility to any recipient of this document or any other party in respect of the fairness,
completeness, accuracy, quality, reliability or continued availability of any Information. Coller Capital may update, complete, correct or revise this
document or any of the Information at any time without notice, but is under no obligation to do so. Any and all warranties of any kind, express
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the maximum extent permitted by law, Coller Capital will not be liable (including in negligence) for any direct, indirect or consequential losses,
damages, costs or expenses arising out of or in connection with the use of or reliance on this document.
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Copyright © 2017 Coller Capital Limited / Strictly Private and Confidential
The Private Equity Secondary Market | 2017
Table of contents
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Evolution of the market ..................................................................................................................................................................... 4
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Why investors commit to secondary funds ................................................................................................................................... 5
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Why investors sell assets in the secondary market .................................................................................................................... 7
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Other market participants ................................................................................................................................................................ 9
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Types of secondaries transaction .................................................................................................................................................. 10
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Pricing development ......................................................................................................................................................................... 12
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Current market environment ............................................................................................................................................................ 13
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Select Coller Capital investments ................................................................................................................................................... 15
For further reading:
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Eli Talmor and Florin Vasvari (2011), International Private Equity, chapter 9: Secondaries fund transactions (Wiley)
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Gerald Carton (2016), The Secondaries Market: Dynamics and Prospects, chapter 2: The secondaries market – strategies for buyers, sellers, fund
managers and advisors, 3rd edition, pp 11-22 (Private Equity International)
Copyright © 2017 Coller Capital Limited / Strictly Private and Confidential
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2017 | The Private Equity Secondary Market
Evolution of the market
The private equity secondary market allows the sale
and purchase of investors’ existing interests in buyout,
venture and other alternative investment funds, and in
portfolios of direct investments in companies.
The private equity secondary market exists principally
to provide liquidity in an illiquid asset class: it is the
only way for individual LPs to exit early from their
investments. As can be seen in Figure 1, the secondary
market has experienced rapid growth over the past
decade, as the private equity asset class has grown and
matured.
Purchasers typically acquire interests in a fund’s
remaining assets and take on the selling investor’s
commitments to meet capital calls in the future.
The secondary market, which has tracked the rapid
expansion of the primary market, allows PE investors:
Historically, secondaries transactions comprised the
sale of Limited Partner (LP) interests in individual funds
or portfolios of funds. However, the secondary market
has evolved to include portfolios of direct investments
in operating companies not held in standard fund
structures. These investments are known as direct
secondaries.
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to achieve early liquidity from their PE assets
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to manage their portfolios more proactively
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to modify their business models in response to
regulatory or strategic change
In recent years, GP-led liquidity transactions (involving
sale of the assets from, or restructuring of, older vintage
funds) have also become increasingly frequent.
Global secondaries transactions by year
40.0
40.0
40.0
37.0
35.0
30.0
$bn
25.0
25.0
25.5
2011
2012
2013
20.7
20.0
16.1
15.0
10.0
24.0
8.5
15.0
10.6
12.7
5.0
0.0
2005
2006
2007
2008
2009
2010
2015
2016
Figure 1
Source: Coller Capital.
4
2014
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The Private Equity Secondary Market | 2017
Why investors commit to
secondary funds
Institutional investors have increasingly acknowledged
the benefits of secondary funds in providing exposure
to private equity across economic and market cycles.
Capital commitments to secondary funds have in
consequence grown consistently over the past decade.
Investors make these commitments for a number of
reasons:
To generate attractive risk-weighted returns
The heterogeneous nature of primary private
equity market means that the secondary market is
characterised by significant price and information
inefficiencies. These inefficiencies enable secondary
players to generate superior risk-adjusted returns.
To diversify their portfolios
Secondary funds offer institutional investors substantial
diversification. Like broad-based funds-of-funds,
secondary funds provide investors with diversification
by investment strategy, geography, industry sector and
fund manager. Moreover, secondary funds offer the
additional advantage of diversification by vintage year.
This ability to back-fill a portfolio with a range of historic
vintages is particularly valuable to investors new to the
private equity asset class.
Building an exposure to the secondary market also
allows investors to smooth performance by repricing
older vintages to current market conditions.
The ‘blind-pool’ risks associated with primary
fund commitments are substantially reduced with
secondaries. Because they can invest in mature,
substantially invested portfolios, secondary funds should
be able to generate attractive returns with a significantly
lower risk.
Analysis by research company Preqin into private equity
strategies over the last decade confirms this (Figure 2).
It shows an attractive risk-return profile for secondary
funds, compared with other private equity-related
strategies.
Risk-return profile of PE strategies
Risk - standard deviation of net IRR
30%
Growth
25%
Early stage venture
capital
20%
Buyout
Other
private
equity
Venture capital
(excl. early stage)
15%
10%
Secondaries
Funds-of-funds
5%
0%
6%
8%
10%
12%
14%
16%
Return - median net IRR
Note: Data as of December 2016 - Vintages 2003- 2013.
Source: Preqin.
Copyright © 2017 Coller Capital Limited / Strictly Private and Confidential
Figure 2
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2017 | The Private Equity Secondary Market
To smooth the ‘J-curve effect’
To gain insight into individual GPs
During the initial phases of a private equity investment
programme, an institutional investor will typically
experience a period of negative returns, as a portfolio’s
underlying fund managers draw capital for investment
and management fees. This phenomenon is typically
referred to as the ‘J-curve effect’. As Figure 3 shows,
performance improves as a portfolio’s underlying
investments benefit from value creation and the
realisation of assets.
Secondary funds can provide insight into primary market
GPs with whom investors are considering a relationship
– reducing the risks of making a first commitment ‘sight
unseen’.
Secondary funds are able to offer institutional investors
mitigation of the ‘J-curve effect’ by acquiring positions
in mature (typically over five years old and >50%
drawn) primary funds, in which the underlying portfolio
companies are closer to exit. Since secondary funds
typically return cash faster than buyout funds or
funds-of-funds, investors also have significantly reduced
capital at risk.
The diversification of secondary funds’ holdings gives
their managers valuable insights into the strengths and
weaknesses of primary market GPs. For this reason,
secondary players often act as unofficial advisors to
investors as the latter are constructing their private
equity portfolios.
The private equity J-curve
Realisation phase
Return
Investment phase
1.0x
1
2
3
4
5
6
7
8
9
10
11
12
Years since inception of a fund
Typical investment time for funds-of-funds / primary LPs
Typical acquisition time for secondary funds
Figure 3
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The Private Equity Secondary Market | 2017
Why investors sell assets in the
secondary market
The recent growth of the secondary market is a natural
consequence of the immense volume of private equity
commitments made in the last decade.
Nor have the pressures entirely gone away, despite the
postponement of Volcker Rule deadlines and potential
dilution of the Dodd-Frank legislation. In Europe in
particular, regulators are still concerned about the
robustness of the continental Europe banks, many of
which have uncomfortably high levels of non-performing
loans. As a result, the banking sector is likely to make
further disposals of private equity-like assets (including
CLOs and NPLs).
Private equity is an inherently illiquid asset class. A
private equity fund typically has a nominal life of
10 years – and the lives of funds have stretched well
beyond this point since the global financial crisis (GFC).
When LPs’ priorities and strategies change, as they
inevitably do over time, the secondary market is the
only way for them to gain an early exit from their
commitments.
In recent years, mergers between large insurers have
been a feature of the US market. This M&A activity,
which results from the need to cut costs in response to
rising liabilities, could also give rise to more asset sales,
as institutions seek to rebalance merged portfolios or
adjust their asset allocations.
LPs have faced a number of specific challenges in recent
years, both strategic and tactical (Figure 4).
Strategic sellers
Financial institutions have been the principal strategic
sellers in recent years. Since the financial crisis, the
pressures on financial institutions have been many and
varied: all banks have had to contend with Basel III; US
banks (especially) with the Volcker Rule; and European
insurance companies with Solvency II; not to mention
the regulatory demands of the G20 Financial Stability
Board.
Banks in continental Europe were forced to shrink their
balance sheets to compensate for sovereign debt writedowns; and publicly-owned banks in the UK and Ireland
faced government-imposed asset disposals.
The secondary market is continuing to respond to new liquidity needs
Cumulative secondaries transactions
$bn
Rise of GP-led liquidity solutions
300
Rise of PE infrastructure secondaries
250
150
100
Rise of direct
secondaries
A cottage industry
focused on PE fund
positions
200
Rise of PE debt secondaries
Advent of PE real
estate and
infrastructure funds
Bank sales of PE begin
Secondary
market begins
Rise of PE real
estate secondaries
Peak of pre-GFC
secondary market
50
0
1990
Secondaries in
Asia and EM
take off
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Figure 4
Source: Coller Capital.
Copyright © 2017 Coller Capital Limited / Strictly Private and Confidential
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2017 | The Private Equity Secondary Market
Tactical sellers
Evolving market
After the global financial crisis, many private equity
investors (especially pension funds, endowments
and foundations, and various types of asset manager)
found themselves with private equity portfolios created
for a pre-crisis world. Many of these institutions have
been tactical sellers, taking advantage of attractive
secondaries pricing to rebalance their private equity
portfolios – by vintage year, investment stage,
investment type or geography (Figure 5). Many large
investors have also used the market to concentrate their
resources in a smaller core of high-quality managers.
Lastly, it is worth noting that the secondary market
is still evolving rapidly. Private equity investments in
real estate, natural resources and other real assets,
infrastructure, and credit are increasingly coming to
market.
GP-led liquidity transactions
We expect secondaries sales to remain buoyant for a
Furthermore, liquidity transactions initiated by GPs
(rather than LPs) are becoming an increasingly important
segment of the secondary market (Figure 6). GP-led
transactions are solutions in which a private equity
manager works with a secondary specialist to offer
liquidity options to its existing LPs, while securing
additional time and funding to maximise the value of
its unrealised portfolio. GP-led liquidity transactions
represented 23% of secondaries investment by value in
calendar year 2016.1
1
It is estimated, for example, that approximately
$4 billion of private equity real estate secondaries
were transacted in 2016, and CalPERS alone sold
approximately $3 billion of private equity real estate
interests in the secondary market in 2015.
number of years as private equity investors continue
reshaping their portfolios.
Evercore.
Secondary market sales in 2016 – by type of seller and reason for selling
Seller type
Endowments /
foundations
8%
Sovereign
wealth funds
2%
Reasons for selling
Family offices
9%
GP-led liquidity
transactions
23%
Pension funds
25%
Financial
distress
1%
Financial
institutions
8%
GP-led liquidity
transactions
23%
Other
2%
Regulatory
pressure
9%
Portfolio
re-shaping
65%
Asset managers
25%
Source: Evercore Secondary Market Survey:
2016 transaction volume (purchase price + unfunded).
8
Figure 5
Copyright © 2017 Coller Capital Limited / Strictly Private and Confidential
Figure 6
The Private Equity Secondary Market | 2017
Other market participants
Buyers
General Partners
The universe of potential buyers for secondaries
has expanded over the last decade as institutional
investors have come to appreciate the advantages
of secondary acquisitions. Buyers now have: varying
levels of experience and expertise; different investment
objectives; and different time horizons.
In the majority of secondaries transactions, GPs
are ‘silent partners’. Rather than principals, they are
facilitators and approvers of secondaries transactions.
On the one hand, there are dedicated secondary
funds and select funds-of-funds for whom buying
private equity interests in the global secondary market
is a major or exclusive investment objective. These
groups have historically been referred to as ‘traditional’
secondary buyers.
On the other hand, there are buyers who participate
on an ad-hoc basis, for example, pension funds, banks,
family offices, endowments and foundations, and even
GPs. These non-traditional buyers are considered to
be opportunistic investors in the secondary market.
In general, they invest to take advantage of a specific
opportunity, usually acquiring interests in funds through
broadly intermediated processes.
Advisers
For many years, institutions wishing to obtain liquidity
in the secondary market were obliged to run their own
secondaries sale process. The limited resources available
to many LPs, and their unfamiliarity with the processes
involved, made this a daunting prospect.
GPs focus mainly on:
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ƒƒ
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control of data – sharing information on the fund(s)
review and approval of potential purchasers
response to due diligence enquiries during the later
stages of the sale process
completion of transfer documentation, to move
ownership of the interest(s) from seller to buyer
In GP-led liquidity transactions, however, the GP plays a
much more active part in the structuring of the solution.
These transactions have several objectives: to provide
a liquidity option to a fund’s original investors; to secure
additional time, and potentially more funding, for a
fund’s remaining assets; and to re-align the interests
of new and remaining investors with those of the
GP through some resetting of a fund’s terms and
conditions.
Restructurings are inevitably complex, and present
many challenges – not least in achieving a satisfactory
alignment of interests between multiple parties. They
tend to be highly bespoke transactions as a result.
As a result, intermediary firms identified an opportunity
to offer secondary advisory services – including portfolio
valuation, market research, and full M&A-style sellside processes. These advisors are used mainly by LPs
disposing of large private equity portfolios. Would-be
sellers seek advice or assistance in a number of areas:
market dynamics; the buyer universe; and process
management. The largest secondary advisory firms are:
Greenhill, Campbell Lutyens, UBS, and Evercore.
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2017 | The Private Equity Secondary Market
Types of secondaries
transaction
If private equity’s secondary market in its early days was
largely a resale arena for LP fund positions, secondaries
today comprise a far wider variety of transactions.
(In addition to this section, see also the section headed
‘Current market environment’.)
LP secondaries – PE fund positions
This is the most common type of secondaries
transaction, representing 71% of transactions in 2016.2
An LP secondaries transaction occurs when a private
equity fund investor sells an interest or a portfolio of
interests to another investor. The purchaser becomes a
replacement LP in the fund or funds in question (Figure 7).
Direct secondaries – assets not held in PE
fund structures
A direct secondaries transaction involves the sale of a
portfolio of direct investments into private companies –
typically owned by financial institutions or corporations
(Figure 8).
Sellers may achieve a number of different objectives
through direct secondaries: generate cash/improve
liquidity; implement changes in strategy; adjust to new
regulatory requirements; avoid the time and cost of
selling assets piecemeal; or spin-out asset management
teams.
The replacement LP also assumes the original investor’s
obligations to pay outstanding commitments to the
underlying funds.
This process allows sellers to achieve a variety of
objectives: obtain early liquidity; implement changes in
strategy or asset allocation; adjust to new regulatory
requirements; or ‘lock-in’ fund returns.
2
Evercore.
Schematic overview of an LP secondaries transaction
Coller fund
replaces
Investor 2
Investor 2
achieves
cash exit
Investor 1
$
Investor 2
Schematic overview of a direct secondaries transaction
Coller funds do not manage
the assets directly
Corporation/Financial
institution
Coller Fund
$
Coller Fund
Newco
Fund
Business 1
GP
Business 2
Company 1
Company 2
Transfer
of assets
Business 3
Figure 7
10
GP
Copyright © 2017 Coller Capital Limited / Strictly Private and Confidential
Figure 8
The Private Equity Secondary Market | 2017
‘Top-up’ capital infusion
Tail-ends
In this type of transaction, private equity funds are
bolstered by ‘top-up’ capital, which is used to provide
capital infusions to the funds’ portfolio companies. The
additional capital is injected into the original fund and
there is no need to manage a separate fund (Figure 9).
A tail-end transaction is the sale of the remaining assets
in an ageing private equity fund. It provides full and early
liquidity to investors, enabling them to accelerate and
‘lock-in’ their returns (Figure 10).
This approach: removes the need for a GP to attempt
a new fundraising at an unsuitable time; offers the
original LPs the option to commit a certain amount of
the ‘top-up’ capital; and may involve rebasing of a GP’s
economics.
Schematic overview of a tail-end transaction
Schematic overview of a ‘top-up’ capital infusion
Non-participating
LPs
Participating
(original ) LPs
Retain % share
of Original Fund
Original Fund
Primary investors
Coller Fund
Fresh capital committed
to Original Fund
$
$
Investors committing ‘topup’ capital receive a share
of all distributions
Coller Fund
$
Fund
GP often
remains the same
Newco
‘Top-up’ capital
Capital infusion for
$ portfolio companies
For all companies
For a GP, a tail-end disposal also frees up management
resources for other initiatives or funds.
All portfolio companies
+
Investment into new
companies
Business 1
Transfer
of assets
Business 2
Figure 9
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Figure 10
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2017 | The Private Equity Secondary Market
Pricing development
The number of secondaries transactions for private
equity interests was relatively small until the mid-1990s,
after which the market expanded consistently. Selling
assets in the secondary market has now evolved into an
attractive portfolio optimisation tool for long-term private
equity investors.
In the early days of the market, prices paid by buyers
often implied a significant discount to NAV. However,
by the early 2000s, numerous specialist firms, fundsof-funds, and leading institutional investors such as
endowments, foundations, and pension funds had
started to engage with the secondary market – as
investors, buyers and sellers. The additional demand
did increase pricing, yet relative to the overall size of
the primary market, secondaries sales were small,
and pricing remained attractive enough to provide a
considerable margin of safety.
Several factors have combined to deliver this higher
pricing: the gradual recovery in public equity markets;
a good exit environment; the ready availability of debt;
and strong fundraising by secondary managers. On the
other hand, strong pricing has attracted a large number
of sellers, which has acted to bring supply and demand
back into closer alignment.
It should be noted that although the move to higher
pricing has been common to the whole secondary
market, the terms for individual transactions vary
significantly from market averages. Brand-name buyout
funds sold in ‘open market’ auctions attract the fullest
prices – the buyers being either secondary funds with a
high degree of macroeconomic conviction, or individual
investors willing to ‘pay up’ for positions in funds they
favour.
The aftermath of the GFC resulted in a period of high
volatility, but secondaries pricing has enjoyed a period
of relative stability since the recovery of the market in
2010. Average prices at auction have risen from 83%
of NAV in 2010 to 89% of NAV in 2016, with a peak
recorded in 2014 (Figure 11). (Note that these are prices
across all types of PE assets; pricing for buyout funds is
higher, with average high-bid prices at auction reaching
96% of NAV in 2014.)
Outside these ‘plain vanilla’ situations, pricing varies
more, and many factors come into play: the type and
mix of assets on offer; the size of a portfolio; the needs
of the seller; the openness of the sales process; the
complexity of a transaction.
We expect secondaries pricing to remain fairly stable
in the medium term – although it is always possible
that macro shocks will lead to wider discounts. (It is
also worth noting that market dislocations typically
create attractive investment opportunities for secondary
buyers!)
Average secondaries pricing as a % of NAV
110%
109%
104%
100%
103%
91%
89%
90%
80%
70%
63%
60%
82%
74%
83%
73%
70%
86%
68%
63%
70%
70%
84%
80% 74%
96%
92%
87%
83%
79%
90%
94%
90%
90%
81%
75%
73%
95%
88%
89%
78%
59%
50%
2007
2008
2009
All PE
2010
2011
Buyout
2012
Venture
2013
2014
Source: Greenhill.
12
2015
2016
Real Estate
Figure 11
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The Private Equity Secondary Market | 2017
Current market environment
Record market volumes
Private equity’s secondary market has experienced rapid
growth in recent years, as institutional investors have
taken an increasingly active approach to managing their
alternative asset portfolios.
In the decade to 2016, LPs committed approximately
$3.8 trillion to private equity globally.3 However, the
onset of the GFC led to tighter regulations and new
economic realities, prompting many LPs to seek early
exits from their commitments via the secondary market.
In consequence, the volume of secondaries transactions
today (around $40 billion annually since 2014) is twoand-a-half times its pre-crisis peak in 2007.4
Compared with the secondary market in quoted
equities, the private equity secondary market is small,
representing only around 1.4% of private equity’s total
NAV. But in some senses, exact volumes are less
important than the prospects and direction of the market –
and these remain strong.
Financial institutions have been large-scale vendors of
private equity assets over the past few years. However,
the divergence in fortunes between US and European
banks has become ever starker in recent times.
3
Thomson Reuters.
4
Coller Capital.
The US banking sector reacted relatively quickly to the
financial crisis. US banks sold assets and restructured
their balance sheets swiftly, and have fared better than
their European counterparts as a result.
However, although American institutions sold large
volumes of private equity assets, the regulatory
direction of travel now looks likely to reverse: the
Volcker Rule deadlines have been postponed again, and
the current administration is talking seriously about a
dilution of the Dodd-Frank regulators.
Although European banks have also shrunk their balance
sheets, the authorities remain concerned about their
robustness, especially because a number of them have
uncomfortably large holdings of non-performing loans.
European regulators are therefore likely to require
further disposals of private equity-like assets (including
CLOs and NPLs).
The rise of GP-led liquidity solutions
Although a significant amount of private equity’s current
NAV will be realised in the normal way, another sizable
portion will prove challenging for GPs to exit within a
sensible time-frame. This is particularly true for funds
where the evolution of portfolio companies was delayed
or badly damaged by the recession.
Unrealised NAV by PE fund vintage year
$313bn
$1,418bn
250
10 year life of a PE fund
$bn
200
150
100
50
0
1999
2000
2001
2002
2003
2004
2005
2006
2007 2008
Vintage
2009
2010
2011
2012
Source: Thomson Reuters.
2013
2014
2015
2016
Figure 12
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13
2017 | The Private Equity Secondary Market
Delayed exits give gives rise to another important
market dynamic: a weakening of LP/GP alignment in
ageing private equity funds. Where they have little
prospect of carried interest or are unable to raise
another fund, GPs may be reluctant to exit investments
because this effectively puts them out of business.
Over $300 billion of assets is still held in pre-2007
vintage funds, according to Thomson Reuters, whereas
funds raised since 2007 hold $1.4 trillion of NAV.5 A
significant proportion of this total value is in funds near
the end of their lives (Figure 12).
Because of these issues, LPs and GPs alike have been
increasingly willing to see existing private equity vehicles
restructured, or (in the case of viable GPs) exited en
bloc, in asset disposals/tail-end sales. Such transactions
tend to be initiated and led by GPs, with the active
involvement of secondary buyers.
Given their complexity to structure and execute – and
the appetite and commitment needed on all sides –
many mooted transactions of this sort never actually get
off the ground. They typically entail lengthy discussions
with the existing LP base and/or members of the LP
Advisory Committee, and can often require a 75%
or higher LP approval threshold. For bidders, a major
challenge is therefore the uncertainty as to whether a
transaction will eventually result.
5
Thomson Reuters One as of 31 December 2016.
6
Greenhill / Lazard.
Nonetheless, $8-9 billion of GP-led liquidity transactions
was completed in 2016 – some 23% of overall market
volume, and an increase on the 13% recorded in 2015.6
Intermediaries believe this level is likely to be
maintained or surpassed in the years ahead.
Real assets secondaries
Real assets transactions have become increasingly
common in the secondary market in recent years as
fund investors have increased their allocations to these
areas. In 2014-15 nearly 70% of LPs were invested in
energy-focused private equity, and 52% of LPs in private
equity real estate (Figure 13).
The growth in private equity real estate secondaries has
been particularly strong; and private equity investments
in natural resources, infrastructure, and credit are also
increasingly coming to market.
It is estimated, for example, that around $4 billion
of private equity real estate secondaries alone
was transacted in 2016. Sellers have tended to be
predominantly North American, reflecting the relative
maturity of the US primary real estate market.
In the long term these transactions are expected to
become increasingly frequent as the secondary market
continues to evolve and mature.
LPs with current / planned private equity exposure to real assets
80%
12%
% of respondents
60%
6%
40%
68%
12%
52%
20%
10%
7%
21%
20%
18%
Mining
Timber
Shipping
15%
13%
0%
Energy
Real Estate
Currently investing
Likely to start investing in the next 3 years
Source: Global Private Equity Barometer, Coller Capital, Winter 2014-15.
14
Farmland
Copyright © 2017 Coller Capital Limited / Strictly Private and Confidential
Figure 13
The Private Equity Secondary Market | 2017
Coller Capital: a track record of closing complex transactions
Coller Capital is a leading player in private equity ‘secondaries’, acquiring positions in private equity funds from
Limited Partners and portfolios of unquoted companies from corporate or institutional owners. These are a few
examples of Coller Capital secondaries transactions:
CVC Capital Partners
Irving Place Capital
Monte dei Paschi di Siena
American Capital
August 2016
July 2015
September 2014
May 2014
Acquisition and spin-out of a
Commitment of $645m, which
Acquisition of a €175m funds and
Establishment of American
$257m portfolio of senior secured
allowed Irving Place Capital to
directs portfolio from a leading
Capital’s third private equity fund,
loans managed by Northport
reposition its 2006-vintage fund
Italian bank.
consisting of seven companies
Capital, into CVC’s direct lending
and establish a new investment
from previous funds, plus capital
platform.
vehicle.
for new investments.
ABSA
Lloyds Banking Group
Crédit Agricole
Lloyds Banking Group
December 2013
August 2012
December 2011
July 2010
Acquisition of a directs portfolio
Agreement to fund the purchase
Acquisition of Crédit Agricole
£480m joint venture with Lloyds
from Barclays Africa Group
of a $1.9bn fund portfolio from
Private Equity (CAPE) and a
Banking Group to hold the Bank
(formerly Absa Group), involving
Lloyds Banking Group.
large majority of the funds CAPE
of Scotland Integrated Finance
managed.
portfolio.
management team spin-out.
3i
SVG Capital plc
Prelude Trust
QinetiQ
September 2009
February 2009
June 2008
June 2007
Acquisition of a direct venture
Acquisition of a 20% stake via a
Acquisition of a direct venture
Partnership with QinetiQ to
asset portfolio of 21 companies
rights issue and share placement
asset portfolio of 18 companies
accelerate the development of
from 3i, the British quoted
by SVG Capital Plc – the major
from the quoted investment
businesses generated from its
investment trust.
investor in Permira buyout funds.
vehicle Prelude Trust.
defence and security-related IP.
Royal Dutch Shell
ABN AMRO
ICICI Venture
AEA Technology
March 2007
December 2006
January 2006
September 2005
$1bn joint venture with Shell
€193m joint venture with
Investment in ICICI Venture’s
Acquisition of a £40m portfolio
to develop a portfolio of 34
ABN AMRO, comprising 26
India Advantage Fund I. This
of corporate venture assets
investments. Shell Technology
life science assets and an
was India’s first secondaries
from AEA Technology, including
Ventures Fund 1 BV is managed
independent management team.
transaction.
Accentus Plc.
Dresdner Kleinwort Benson
Abbey
Lucent / Bell Labs
RBS / NatWest
September 2004
January 2004
December 2001
June 2000
Purchase of a portfolio of
Purchase of a portfolio of blue
Purchase of a direct venture
Formation of a syndicate to
companies from Dresdner
chip buyout funds with a 3.5 year
portfolio from Lucent’s Bell Labs,
acquire a $1bn portfolio of direct
Kleinwort Benson, with
embedded vendor loan.
with management team spin-out
and fund assets from the UK’s
to form NVP.
NatWest Bank.
by a team spun-out from Shell.
management team spin-out.
Copyright © 2017 Coller Capital Limited / Strictly Private and Confidential
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2017 | The Private Equity Secondary Market
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