Azla Advisors, a boutique secondary sell-side advisory firm, has advised Merrill Lynch on the divestment and syndication of EUR150m of original commitment in Kreos Capital III, the 2006
Azla Advisors, a boutique secondary sell-side advisory firm, has advised Merrill Lynch on the divestment and syndication of EUR150m of original commitment in Kreos Capital III, the 2006 vintage fund of Kreos Capital, to five investors.
The investors are led by Paul Capital and include AIG PineStar Capital, the secondaries private equity team of AIG Investments, HarbourVest Partners, Access Capital Partners and SVB Financial Group, the parent company of Silicon Valley Bank.
Using its proprietary valuation methodology, Azla’s team conducted a bottom-up due diligence of the 75 companies in the Kreos III portfolio. This process enabled Azla to demonstrate hidden portfolio value, which enabled Azla to both optimize pricing and meet the buy side participant’s return requirements.
Roman Kogan, director at Merrill Lynch, says: "We are very pleased with the outcome of the secondary sale process run exclusively by Azla Advisors. Despite a challenging economic environment, Azla’s detailed approach and bottom-up valuation analysis allowed us to optimize transaction pricing. Azla’s strong buy-side relationships, fundamental understanding of venture debt, and ability to educate the market on this unique asset class were central to an effective execution strategy. We also appreciated the commitment of Azla’s management to this transaction and their very responsive client service, both of which had a strong impact on the closing of the transaction. While many secondary transactions have not been able to close in this market, Merrill and Azla partnered to achieve a successful closing that included five first-rate investors."
Ross Ahlgren, general partner at Kreos (pictured), says: "Azla worked very closely with Kreos throughout the secondary process and we found that their valuation methodology and models gave full weight to the significant value in all elements of our portfolio. We found that Azla’s hands-on approach and their team’s experience as company management and GPs enabled them to get up to speed on our asset class very quickly."
