HarbourVest Partners and AlpInvest Partners have completed a secondary transaction through the establishment of a new fund, Paragon Partners Secondary LP. Paragon Partners has acquired an existing portfolio of three European companies providing a comprehensive exit solution to Afinum, an independent German private equity fund manager.
The transaction provides Paragon Partners with the capacity to provide follow-on capital to the portfolio companies, and also to pursue further transactions of this type. Together, HarbourVest and AlpInvest have made initial commitments totaling €47m to the Paragon Partners Secondary LP fund.
The transaction marks the first of its kind in Germany and has provided Afinum and its investors with a tailored exit solution for a portfolio of tail-end investments. Secondary direct assets are an attractive growth segment in the secondary market and both HarbourVest Partners and AlpInvest Partners are pro-actively targeting this segment.
Edin Hadzic, one of the three founding partners at Paragon, said: “We are excited about the quality of the portfolio that we have acquired and are looking forward to working with management to unlock the significant value we see in all of the businesses. HarbourVest and AlpInvest have proven to be invaluable partners in this transaction. We believe that this is a milestone transaction for the German secondary direct market, paving the way for private equity firms to realize value in their portfolios efficiently.”
Paragon Partners was founded in 2004 by Edin Hadzic, Krischan von Moeller and Stefan Winterling and specializes in secondary direct investments in the mid-cap buyout market. Paragon acquires and actively manages controlling stakes in companies currently held by private equity funds or strategic investors who may be looking to divest a fund or a particular portfolio of businesses.