Berlin-based private equity platform and manager Moonfare has launched its first semi-liquid strategy.
Moonfare’s chief investment officer Sanjay Gupta leads the strategy and said the fund addresses two major themes for the private equity industry: secondary investments and the liquidity challenge.
“As the most liquid segment of all private equity assets, secondary investments are particularly well suited to a semi-liquid offering,” said Gupta. “There is minimal friction between private equity’s historical illiquidity and increasing investor demand for a potential exit earlier than the traditional ten-year tie-in.”
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The proprietary secondaries strategy will leverage Moonfare’s direct investments expertise, and its relationships with high-quality managers and intermediaries, the firm said, to target a balance of GP-led continuation vehicles and LP-led secondary transactions.
It will focus on quality assets and funds managed by blue-chip managers.
Moonfare noted that the strategy could offer benefits traditional private equity structures might not, including defined assets, reinvestment of proceeds, the ability to hold assets beyond the typical ten-year holding period, and a cash-flow profile that benefits from compound interest.
Gupta predicted that secondary funds – which may offer an attractive risk-return profile, shorter time to distributions and the potential for broad diversification – will continue to grow thanks to the way primary fundraising growth is driving secondary deal flow, and record secondaries fundraising in recent years.
To date, Moonfare has offered more than 110 private-market funds from firms including KKR, Carlyle and EQT, and has over €3 billion on its platform.