Unigestion has reached a first close on Unigestion Secondary Opportunity II LP, securing €135m in commitments. The Swiss asset manager expects to reach the target size of €150m by the summer. The hard cap has been set at €200m.
The new secondary vehicle is earmarked to purchase stakes in international funds run by managers experienced in small to midsized transactions (typically €5m to €15m).
“Assets written down from 2007 [and] 2008 are being sold at substantial discounts and you can now buy assets that are partially already refinanced or restructured,” says Hanspeter Bader, managing director of Unigestion’s private equity activities. “We believe it’s an interesting period to have capital available to spend in the secondary market.”
Unigestion raised money for the effort from a mix of old and new investors located in Europe, including UK local authority pension funds, French pension funds and insurance companies and German and Swiss institutional investors.
The firm intends to complete 20 to 25 secondary transactions over the next 24 to 36 months. Expect 60% of the transactions to take place in Europe, and the rest in the United States and Asia.”We will be focusing on single fund assets rather than portfolio assets,” says Bader. “We might look at a portfolio of two or three funds but not as high as 15-20.”
Bader says the primary fund-of-funds and secondary businesses of Unigestion are closely linked. When working on a secondary transaction, the secondary teams receives support from at least one colleague from the primary team who knows the asset or the GP. However, as a rule the firm would not buy a secondary interest requiring a primary commitment down the road.
Unigestion’s first secondary fund was invested from 2001 to 2003, which Bader considers the last period when secondary buyers could obtain significant discounts to net asset value on properties.
Unigestion has some €7bn in assets under management, of which more than €1.2bn is invested through private equity funds-of-funds. The firm employs over 140 people working in its Geneva headquarter and in offices in London, New York, Paris, Singapore and Guernsey.