Buying and selling private-market investments can be challenging due to their long-term, illiquid nature. The Family Office provides a groundbreaking solution through its proprietary Secondaries Marketplace. Sellers provide the number of shares they wish to sell from one or more private market deals in their portfolio and the minimum asking price. Buyers bid on listed deals by specifying the number of shares they wish to buy and the offer price per share. The Marketplace thus allows investors the opportunity to sell illiquid investments when necessary or buy them at a good price.
Figure 1: The life cycle of private markets
Source: The Family Office
Advantages to Sellers
Liquidity and exit options: The secondaries market provides a solution for sellers to manage their illiquid investments.
Freeing capital: Sellers have the opportunity to waive outstanding capital calls, freeing capital for other investments.
Portfolio rebalancing: The secondaries market allows sellers to rebalance their portfolios. For example, a seller may wish to reduce exposure to certain asset classes or sectors. This approach is particularly relevant when sellers seek to align their portfolios with changing market outlooks or to further diversify their investment risks.
Advantages to Buyers
J-curve mitigation: Secondary buyers often buy assets that have already increased in value since the initial investment was made at a price below the net asset value, avoiding the J-curve effect associated with the early stage of private-market investments.
Access to unique deals: Secondary buyers can acquire stakes in well-performing funds that they may have missed during the initial fundraising phase.
Improved visibility: Secondary buyers can access more information about the underlying assets and cash flows because secondary market deals have a performance track record. Thus, buyers can better assess the risk and potential return of a potential investment to make more informed decisions.
Shortened call life cycles: Secondary buyers typically enter investments at a later stage of the life cycle of the fund. This shortens the investment horizon, limits the frequency of capital calls, and accelerates distributions.
Fast, Seamless, and Easy Digital Auction Process
Buying and selling private investments on our Secondaries Marketplace involves five key stages.
Sellers enter the minimum number of shares they wish to sell from one or more deals in their portfolio and the asking price per share. Then the sale offer is confirmed and made available to other investors at The Family Office.
Buyers state the number of shares they are willing to buy from the listings they are interested in and the offer price per share. Sellers are notified instantly of purchase offers and may either accept or reject the offer depending on its suitability in terms of the price or number of shares. If the offer is accepted, payment is typically processed within 72 hours.
Key Features of The Family Office Marketplace
Standardized end-to-end digital process: Sellers and buyers engage in all stages of the transaction through a seamless digital experience.
Detailed dashboard view: A dashboard provides detailed, real-time information about the opportunities available, including historical performance, expected returns and expect exit dates.
Diverse asset classes: Investors can buy and sell a wide range of illiquid investments, including private equity, private credit, and real estate.
24/7 access and communication: The Marketplace is accessible 24/7. Sellers and buyers are kept informed of all activity through e-mail and push notifications, ensuring no opportunity is missed.
Privacy and transparency: All transactions on the Marketplace are secure and anonymous.
In conclusion, The Family Office Marketplace provides an easily accessible, swift, and transparent solution for investors to who wish to benefit from trading secondaries.
Key Takeaways
The Family Office Marketplace offers a solution to the illiquidity inherent in private markets.
The Marketplace provides a seamless experience, enabling buyers and sellers to trade in a simple, transparent process.
The Marketplace allows investors to take full advantage of the many benefits of the secondaries market.
For more information about The Family Office Marketplace, schedule a call with our advisors.
Do you want to learn more about secondary markets? Read our article about the role of secondary markets.