Private Investors back Hambro secondaries fund acquiring founder stakes in tech companies
Clients of Connection Capital, the specialist private client investment business, have collectively invested GBP5 million into HP Access Fund II, a specialist venture capital (VC) fund focused on buying secondary stakes in later stage investments in the UK and European technology companies.
The fund, managed by the London-headquartered international investment firm, Hambro Perks, provides liquidity to motivated sellers of minority stakes in technology businesses in between formal funding rounds. Typically, sellers are founders or Angel investors who wish or need to release all or a portion of their holdings ahead of a formal exit in a market which is highly illiquid.
This strategy means that partially de-risked equity stakes in fast-growing, established private technology companies can often be acquired at a discount to the current valuation, and also means investors in the fund should have the benefit of earlier exits than is usual with most VC investments.
The fund aims to deploy capital quickly, typically within a year, thanks to its strong pipeline of potential investment opportunities, sourced from Hambro Perks’ extensive network of angel investors, founders, family offices and VC firms.
Connection Capital clients were able to participate in multiples of GBP25,000, and this is the second fund managed by Hambro Perks to be offered to Connection Capital clients this year. It follows on from the success of the HP Special Opportunities Fund I investment, which gave private investor clients the chance to invest in a portfolio of unquoted stocks acquired from global fund manager, Invesco.
Lorna Robertson, Head of Funds at Connection Capital, comments, “This is an extremely interesting and compelling proposition for our clients to invest in a niche, emerging segment of the VC market, managed by a leading, highly experienced VC manager with a strong sourcing network and proprietary access to top quality, below-the-radar deals, with whom we have an excellent relationship.”
“Hambro Perks’ strategy inverts the typical VC supply/demand dynamic by offering liquidity outside of formal funding rounds, in a market where exits can take many years and most VC firms are focused on providing growth capital rather than cash out.”
“This allows Hambro Perks to access a wider universe of secondary opportunities with complete market visibility. Participating in the HP Access Fund II gives our clients an opportunity to invest in growth companies after the early high-risk stage, diversifying their exposure to the VC asset class with the potential for good risk-adjusted returns, mitigating the long fund life and steep J-curve typical of VC returns.”
Jemma Bruton, Co-Head of Access Fund, says: “We are excited about Access II, which is a unique offering within the world of venture funds. The feedback we’ve had from existing LPs has been very positive, and we look forward to continuing our successful investing strategy for the new investors.”