Secondary direct investments
Secondary transactions on Limited Partnership stakes in funds are common place in the maturing European venture capital and private equity market. Secondary direct transactions however remain a relatively new phenomenon.
Secondary direct transactions involve the sale of portfolios of direct investments.
Sellers may have very diverse objectives when entering into a secondary transaction.
- The fund may be approaching the pre-agreed liquidation time and the General Partner wants to return cash to his investors.
- The owners want to optimise their asset allocation.
- An early exit can improve the IRR to investors.
- Return of capital resources to core business objectives.
- Reduction of management cost.
- Avoidance of need to make follow on investments in portfolio companies.
Becap offers not only liquidity it also assures the continuity of management for the investments in the portfolio.