What is a direct secondary?
Historically, the only options for investor liquidity have been a public offering, sale of the company or recapitalization. However, as the private equity industry has matured and developed so has the range of exit options available to investors. A direct secondary transaction is the sale of a particular investor’s investment in a privately-held, operating company to a new third-party investor.
Private equity investors now have control over the timing of exits and realizing gains and losses of their assets. This provides shareholders and general partners the broad flexibility to more effectively manage their portfolio strategy.
As the leader in the direct secondary market, W Capital is solely dedicated to offering current equity investors an alternative exit strategy for their highly-illiquid direct private equity assets.
What is your approach to working with your portfolio companies?
We view strong relationships with senior management teams as a critical success factor for our companies. We utilize our team and relationships to function as a value-added investor through board representation, strategic input and follow-on capital for selected companies. With well over $1.0 billion of committed capital under management, W Capital provides portfolio companies and its co-investors the following:
- Proactive, creative input and participation across the Firm’s portfolio companies
- Access to follow-on growth capital for individual portfolio companies
- Extensive technology and operating experience with private and public companies
- Development and assessment of strategic opportunities for portfolio companies in the areas of financing strategies, business strategies and mergers & acquisitions
- Access to our network of strategic relationships with portfolio companies, leading corporations and financial institutions
What is your investment strategy?
We are unique from other private equity firms in that we obtain our ownership positions by acquiring non-strategic investments from leading corporations and financial institutions. Once we own an investment we are long-term investors and possess dedicated resources and financial and strategic support focused on long-term value creation for the entrepreneur and other shareholders.
Who should consider a direct secondary?
W Capital pursues transactions with a broad range of institutional investors such as:
- General Partners managing funds that would benefit from near-term realizations and distributions to limited partners
- Banks, investment banks, insurance companies, family offices, high net worth individuals, and other investment institutions reducing exposure to private equity and venture capital
- Corporations rebalancing their exposure to strategic investment initiatives
- Hedge Funds seeking accelerated returns for side pocket investments or redemptions
- Fund-of-Funds reallocating assets for proactive fund management
- Founders or employees seeking liquidity for estate planning purposes
Why sell?
We are familiar with nearly all of the issues involving an institution's decision to exit part or all of its private equity holdings. We welcome the opportunity to have a confidential discussion about any particular situation and goals of an investor. The benefits to considering a sale or a portfolio restructuring include:
- Generate cash and income from highly illiquid assets
- Return capital resources to core business objectives
- Reduce internal managerial expenses and overhead associated with managing investments
- Relinquish the burden of providing follow on capital for existing portfolio companies
- Participate in future growth of the assets through alternative transaction structures
- Reallocate assets into new areas as investment and liquidity objectives change
- Pursue a new investment strategy based upon a recycling of capital resources
What is your expertise?
Our team has over 100 years of experience at leading institutions including Banc of America, Barclays Capital, Canaan Partners, C.E. Unterberg Towbin, General Electric, Hewlett-Packard, Jefferies, J.P. Morgan, Lehman Brothers, PaineWebber, Robertson Stephens, Sidley Austin, and Stone Point Capital. Our industry expertise in technology, business services, manufacturing, health care, and financial services allows us to work well with management teams in creating value for our portfolio companies.
As a result of our broad based portfolio of investments and the extensive experience of our principals, W Capital has relationships with many of the top-tier venture funds, private equity funds, Fortune 500, university research centers, investment banks and other financial institutions around the world.