A Unique Deal in the Asian Secondaries Market

Secondary purchases of limited partnership interests is still a relatively nascent market in Asia, whether for Asian or non-Asian partnership interests. AddVenture had proprietary access to an Asian seller’s diversified US/Europe/Israel portfolio (about $200M in size) through a strong existing relationship with the LPs of a troubled fund.

The process involved going right back to the basics: first “educating” the investor on how secondaries worked, and persuading the institution to give the idea a try – not done before in that country.

AddVenture took the portfolio to a select, small group of secondary players and managed the bid process including several variations of pricing packages. The portfolio was not easy to price as there was a mix of troubled funds and sponsored funds as well as partnerships that had healthy portfolio companies poised for IPOs within 12-18 months.

Whilst secondaries are not a core business for AddVenture, we do opportunistically position to work on such deals if the conditions are sufficiently private.

Since this transaction, the market has developed considerably further and increasingly we see stapled transactions (primary + secondary wrapped up as a package).

We foresee secondaries on Asian partnerships as an area of growth in the forthcoming years as the private equity cycles round their course.