Daniel Ibri is the managing partner and founder of Mindset Ventures Sao Paolo. We sat down with Daniel and discussed some of the pains of fundraising for emerging market funds looking to expand outside of the constraints of their own borders. In this Q&A he explains why Palico is an essential tool for small funds and how it helped attract new investors beyond Brazil.
Apr 6, 2018 10:09:16 AM / by Robert Ientile
|Palico’s Secondary Listings|
Four out of five second-hand fund transactions initiated in Palico’s digital marketplace revolve around offers for private equity fund stakes worth $10 million or less. Some 45 percent of secondary transactions on Palico involve stakes of $5 million or less. In the six years since Palico’s digital PE fund marketplace launched, stakes with a combined net asset value of $451 million have been listed on the platform, covering an ever-expanding range of strategies from buyout to credit.
|The Appeal of Selling and Buying Secondaries Online|
Apart from specialists who have the requisite resources and connections, secondary selling and buying can be difficult. But on Palico, information from sellers is anonymously transmitted to buyers who’ve already expressed an interest in the fund or funds via wishlists. After receiving bids, sellers only reveal their identity to potential buyers if they choose to do so. For secondary buyers, Palico offers hard-to-find dealflow - and frequently hard-to-find funds - in just a few clicks.
|Half of Palico’s Secondary Sales are for Smaller Funds|
Some 50 percent of secondaries transactions on Palico involve funds that raised $250 million or less from investors. These smaller funds tend to focus on relatively neglected, and potentially attractively priced, small cap assets. They also frequently specialize in niche investment areas and in newer geographies where there’s less competition.
|$227 Million Invested via Palico|
In 2017 limited partners invested $227 million in primary fundraisings and secondaries via Palico’s digital marketplace, overwhelmingly in smaller and more specialized funds. As average fund size grows amidst a record number of fundraisings, Palico’s digital marketplace helps harder-to-find primary fundraisings and small secondary offerings standout, bringing them to the desktops and smart devices of interested investors the world over. Palico is making private equity ‘alternative’ again, even as the overall industry becomes mainstream.
Luca Mannucci is the Milan-based investment advisor for Italy’s Banca Sella Holding. He explains why the banking group invests in funds via Palico’s digital marketplace.
Angel Garcia Diez is head of investments at Spanish insurance group HNA. He explains here why HNA invests through Palico’s digital marketplace.