Secondaries
Opportunities in existing portfolios. With fast cash flows.
Building up the secondary business, which gives our clients access to one of the most dynamic segments of the private markets, has been an exciting challenge for the past 15 years.
Richard Wilmes
Partner · Head of Secondaries
Secondaries – the investment strategy of the moment.
With the advent of liquidity and quota bottlenecks, many investors are looking to sell current private market investments. The simultaneous relative scarcity of buyer capital makes secondaries an attractive market environment. There are three strong reasons in favour of this investment strategy:
High selectivity
Investors in the secondary market have a good selection and can invest selectively in portfolios of companies with robust business models and attractive growth opportunities.
Attractive buyer’s market
Supply and demand are in a favourable relationship for secondary buyers. Discounts on the book value are granted as a premium for providing liquidity - even for high quality portfolios of very well established fund managers.
Stability in the SME sector
History has shown that this sector offers excellent prospects: small and medium-sized private companies achieve better returns on average with lower risk than larger companies. While this market segment may not be transparent, the competitive situation here makes it particularly attractive for buyers.
Golding offers sellers a reliable transaction partner and institutional investors efficient and attractive access to private equity via a wide range of transaction types in the secondary market.
Thomas Hallinger
Managing Director · Secondaries
As a well established partner, we have better information on fund portfolios, portfolio companies and fund managers.
We value efficiently diversified portfolios that make the most of opportunities and enable an attractive and stable distribution level as quickly as possible. With our broad investment platform and our extensive long standing network, we have access to a comprehensive deal flow and better information on fund portfolios and portfolio companies in terms of their risk/return characteristics.
Secondary transactions with a focus on basic growth trends.
We make consistent use of the positive characteristics of secondaries in the small & mid-cap segment:
- Transactions with basic growth trends in the less competitive small & mid-cap segment enhance the opportunities for sustainable returns and at the same time, can lead to reduced risk
- Greatly reduced J-curve due to early portfolio building and performance in addition to returns and income in the first few years
- Reduced "blind pool" risk by means of acquisition of existing investment portfolios
- Market inefficiencies and the high number of opportunities in the small transaction segment enable attractive purchase prices and (excess) returns
A long standing partner of institutional investors.
Investors and partners appreciate the personal cooperation with us and benefit from our expertise in legal, tax and valuation issues as well as with the regulatory requirements of institutional investors. With our specialised secondaries funds, we offer investors efficient access to the secondary market.
Due diligence on each individual investment opportunity.
Our investment process with key criteria ensures a stable track record across market cycles. ESG analyses are an integral part of our investment process.
Investing in Secondaries also involves risks.
- There can be no guarantee that a specific return or earnings target will be achieved. Past returns and forecasts are no guarantee of future success.
- Minority shareholders who are not involved in the management of a fund have no or only limited influence over the fund manager.
- At fund level, the use of not inconsiderable external financing (leverage) is often permitted and common. Although the use of leverage can improve performance, it also increases the potential for loss.
- The market values of funds may be subject to significant fluctuations due to macroeconomic factors and/or other changing market conditions.
- Funds are usually unregulated investment vehicles that offer only limited investor protection.
- The investor bears the risk of the tax and regulatory structure of the funds and the investments made.
- If risks materialise, investors in the funds may suffer losses in value up to the amount of the total loss of the invested capital.
Details risk information can be found in the issue document of the respective investment programs.
