Liquidity Crunch Fuels $100Bn Secondary Market: Here's What You Need To Know

Billion Dollar Moves™ with Sarah Chen-Spellings | Global Venture Capital

"Secondaries are just deals with a discount?" Think again.

In this episode, we explore how the secondary market has surged to a staggering $100 billion in transaction volume, driven by the pressing need for liquidity. Featuring Martin Fleischer, Principal of Coller Capital, and Ku Kay-Mok, Senior Partner at Gobi Partners, we talked about the explosive growth of continuation vehicles and the challenges general partners (GPs) face in navigating this dynamic market.

Tune in now as we unravel the complexities of the secondary market, its great opportunities, and the strategic moves that can make or break investment portfolios in these volatile times.

TIMESTAMPS / KEY TAKEAWAYS

0:00 - Intro

02:04 - Introduction: Martin Fleischer, Coller Capital & Ku Kay-Mok, Gobi Partners

04:20 - What really is the secondaries opportunity? The 100bn secondaries transaction volume driven by liquidity

06:18 - Structures for LPs and GPs in secondaries; the market growth of continuation vehicles

08:41 - Challenges for GPs in secondaries: pricing and carry split

10:20 - “I think we are the necessity in this market; people want liquidity for various reasons”; CV as the third exit route for GPs

12:50 - GP’s view: structuring exits; “theme is important for VC”; being strategic with co-investors and building liquidity

15:17 - “Be patient if you don't want to sell”; price drop in consumer space and outdated valuations

17:09 - Discount premium, implied valuation multiples, patient capital, and plans to drive returns

19:51 - “The secondary market will become more and more specialized”; “the biggest constraint is capital”

22:41 - Advice for LPs building base in the Nordics; re-industrialization and opportunities in global south

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Arctic15 LP Summit 2024

PANEL: Secondaries & Exits for This Venture Cycle

Martin Fleischer - Principal, Coller Capital

Ku Kay-Mok - Senior Partner, Gobi Partners

Moderator: Sarah Chen-Spellings - Co-Founder & Managing Partner, Beyond The Billion

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