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Insight Venture Partners runs fund restructuring that could total $1 bln

  • Insight one of several large venture players using secondaries
  • Process recently hit the market
  • Would allow current LPs to cash out or roll with manager

Another big venture player is using the secondary market to sort out older funds.

Insight Venture Partners, a venture and growth investor based in New York City, is running a secondary process that will enable LPs in older funds to cash out of their stakes or stick with the manager in a continuation vehicle.

It’s not clear which funds are targeted in the process. The total value of the secondary could reach $1 billion, four secondary-market sources told Buyouts.

Lazard is secondaries adviser. No one from IVP responded to a request for comment.

It’s also unclear how far along the process is, but two sources said it recently hit the market.

Insight Venture Partners, formed in 1995 by Jeff Horing and Jerry Murdock, manages more than $20 billion. The firm invests in high-growth tech companies. Past investments include Twitter, Hootsuite, Mimecast, Pluralsight and Zenefits.

Most recently, it closed Fund X on $6.3 billion last year. It raised $3.3 billion for Fund IX in 2015. Fund VIII closed on more than $2.5 billion in 2013, and Fund VII closed on more than $1.5 billion in 2011.

Insight is one of several large secondary processes in VC that have helped boost activity on that side of the market.

Last year, New Enterprise Associates completed a secondaries-backed spinout, which moved 31 assets out of four older funds with vintages from 2006 to 2015. Those assets were lodged in a new fund managed by NewView Capital, which was formed by ex-NEA General Partner Ravi Viswanathan. Goldman Sachs led an investor group that also included Hamilton Lane in buying the assets out of the older funds and kicking in fresh capital for add-on and new investments.

Another deal involves Altos Ventures, which has apparently reached the finish line, according to sources and Form D filings. Altos sought to move assets from its 2008 Fund IV into a new pool that would give the GP more time to manage out the investments, Buyouts reported. As well, LPs in the older funds got the chance to cash out or roll with the GP.

In 2018, venture secondaries made up about 8 percent total volume, according to a full-year deal volume report from UBS. Middle-market buyouts took the largest slice of the market at about 42 percent, while megabuyouts represented about 31 percent of total volume, UBS said.

Action Item: Check out Insight Venture’s Form ADV here: https://bit.ly/2USIyOc