Private Equity Secondaries
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- čas přidán 1. 06. 2024
- Due to demand for further clarification on private equity secondaries, we've created this video to discuss in detail the definition of "primary" vs. "secondary" equity markets, private equity fund secondary transactions, and private equity direct secondary transactions.
We also use real life examples to explain these concepts. When explaining private equity direct secondary transactions, we look at BlueCat Networks, a growing technology company that received capital from Northleaf Capital Partners in 2009. Seven years later in 2016, Northleaf increased its stake in BlueCat Networks by buying the stake of a private equity fund that was looking to exit its investment. This deal is a great example of a private equity direct secondary transaction!
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Disclaimer: All investment and financial information expressed in this video is for educational purposes only.
#MinkLearning #privateequity #secondaries #market #investment
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Very clear, professional and interesting. Thanks Steve!
Thanks Simona!
Whether the PE secondary prevents the J curve depends on how much premium it pays to the PE seller? If it pays too much and the start-up goes bad, PE secondary loses money
Brilliant content Steve, many thanks.
Thanks so much, Mpumelelo!
Thank you so much for this clear explanation!
Thanks so much for your comment, Isabella!
Well explained and illustrated, thank you.
Thank you dcwalk1. I appreciate your comment!
This man just got himself a new subscriber
Awesome. Thanks Darros. Happy to have you as a subscriber. If you have any future recommendations for CZcams video topics, please don't hesitate to let me know!
Steve, i appreciate your time in sharing these informative videos in the PE space. Quick question, are there any opportunities for sales guys in PE and secondaries? I can easily make 100s of calls a day, have lots of principal contacts and dont mind doing the grinding to develop new business for a fund manager. Had series 7 in the past and willing to take all exams
Your videos are awesome, Steve.
@Johan Benson You suck
@Mustafa Josiah Loser
Excellent , Secondaries are going to be a Big Business !!
Thanks for your comment! I agree. There is quite a lot of demand for PE Secondaries.
Hi Steve - could I kindly ask how PE secondaries transactions are priced? I know that they tend to trade at a discount to NAV, however some trade at a premium too. Is this discount-premium dynamic ad-hoc, or are there set rules when it comes to pricing? Thank you
Hi hwaryoue, thanks for your question. The discount-premium dynamic is based on the supply and demand for the secondary. While there are no "set" rules, there may be restrictions/rules stated in the Limited Partnership Agreement.
Also to note, in times when the public markets fall, more investors will need to sell their PE stake on the secondary market (e.g. to rebalance their portfolio). In these times, such as in 2008/2009, PE secondaries traded a large discount to NAV).
Does that answer your question? If not, please write me back and I'll do my best to answer it.
@@SteveBalaban Sound good.
@@SteveBalaban You're answer is so informative. A doer who is able to teach as well as you are is an uncommon thing. Thank you.
@@SteveBalaban Hi Prof Balaban, I'm your former student and now coming back to these videos to review some PE concepts. They really helped to refresh my knowledge and prepare for interviews. Could I ask what factors are considered to determine such discount to NAV in secondary transactions? Thank you.
Hi Steve, I really appreciate your videos! I have a question. Sounds like secondaries is a perfect scenario, you mitigate the J curve, you have a more liquid asset in less time. Why would anyone invest on a regular 10 y PE fund if you can buy a secondaries fund? I don’t see the trade off. Sounds like a win win situation.
Great point, Mark. Well, you can't always get secondaries in the funds that you want. Also, a lot would depend on the price you are paying for the secondary (and the access to get that secondary). With that said, secondaries are a very attractive investment option, especially for family offices that don't want to lock up their capital for a full 10 years.
Hi Steve,
Thanks for the great video. Is there a course we can subscribe to for accessing detailed videos?.
Thanks!
Thanks Bharagwaj. I recently hired one of my ex-students and we are creating a complete library of Private Equity content. We are expecting to launch it in 2021. We're excited to put it together! If you want us to notify you when it's done, please email me through my site: www.minkcapital.ca/. Also, if you have any suggested topics, please let us know. Thanks again Bharagwaj!
Hey Steve, I’m new to the concept wondering if there is a platform for secondaries? I’ve started a self-funded firm in Toronto so I’m really appreciating the content.
Are you hiring student interns?
My goal♥
How can you find out when the PE fund term ends?
Thanks for answering that, Larry. Vasu, if you want more information on a Limited Partnership Agreement (LPA), please see this video that we made on LPAs: czcams.com/video/wnECpCzYY74/video.html
Why do some companies have separate teams for secondariies? Isn't the process of acquiring the asset similar to regular PE?
It's similar, but there are different elements, such as valuing the secondary transaction. For example, when buying a secondary fund, you'll negotiate the discount/premium to NAV that you will pay. The price isn't set.
That's just one example. If you need further clarification, please let me know.
Secondaries is devouring PE
grazie!!
Prego :-)
His voice at the start is kinda funny
love the content, but please please look straight, kinda throwing me off