Moonfare Reveals Details of First Secondary Offering

Fundraising platform Moonfare has revealed details of its first semi-liquid secondary strategy amid a growing intersection between secondary products and private wealth products.

Details come four months later Secondary investor was the first to announce the launch of the product. The company registered the Moonfare Secondary Fund in Luxembourg in March, Secondary investor noted at the time.

The strategy will aim for a balance between GP-led continuation vehicles and LP-led secondary vehicles, according to a statement on Wednesday. It will focus on quality assets and funds managed by top-tier managers. Moonfare’s chief investment officer Sanjay Gupta will manage the semi-liquid vehicle.

“As the most liquid segment of all private equity assets, secondaries are particularly well-suited for a semi-liquid offering,” Gupta said in the release. “There is little friction between private equity’s historical illiquidity and growing investor demand for a potential exit sooner than the traditional 10-year timeframe.”

The Berlin-based platform said it would leverage its direct investment expertise and relationships with powerful market players to implement the secondary strategy.

Moonfare already has strong ties to the secondary market. In 2021, it partnered with Lexington Partners to allow users to sell their fund holdings to Lexington and other investors on the platform through a formal process held twice a year.

Some of the firms available on Moonfare’s platform – such as AlpInvest Partners and Ares Management – ​​also offer secondary strategies that could theoretically be offered in a secondary portfolio product.

According to Gupta, secondaries can offer significant J-curve smoothing and an attractive risk-return profile for private investors.

Secondary investor and affiliate title International Private Equity have written extensively on the benefits of secondary instruments for evergreen vehicles – funds that do not have to return capital to investors after a set period – as well as the potential barriers to entry when it comes to adopting a secondary instruments strategy within such funds.

The growing overlap between secondaries and private wealth is also reflected in traditional secondaries investors’ efforts to develop permanent vehicles. Firms such as ICG, Pantheon and Coller Capital have begun offering permanent strategies exclusively in secondaries. Secondary investor Previously reported.