Private investment firm Netley Capital (Netley) has launched Netley Capital Tertiaries with $315m in committed, deployable capital, which it says is the industry’s first pool of capital dedicated to buying secondaries stakes in secondaries funds.
Tertiary investing is the purchase of an investor’s interest in a secondary private equity fund, either in a ‘traditional’ secondary fund that holds many underlying investments in primary private equity funds, or in a single or multi-asset continuation vehicle. Demand for tertiary solutions is growing rapidly, driven by an explosion in activity in the secondary market.
Netley Capital focuses on acquiring interests in secondary funds where the underlying investments are mid- and large-cap global private equity buyout funds. Netley’s investor base consists of blue-chip institutional investors and significant family offices. The first transaction is expected to close in the coming weeks.
“Achieving this amount of committed capital in a relatively new segment of the market reflects the current need and future potential of the strategy.” said Netley Capital Managing Partner Caspar Berendsen. “While the concept is new, the manner of investing is not. We are developing a market where demand far exceeds supply.”
Berendsen, who has overall responsibility for investing capital for the franchise, leads a team with decades of experience and deep expertise across private equity primaries and secondaries, secondaries advisory and investment banking. Prior to setting up Netley, Berendsen spent two decades at Cinven, where he built the firm’s financial services franchise and launched Cinven’s mid-market strategy.
With the secondaries market on track to surpass $200bn in transactions this year, Netley sees tertiaries as a natural evolution of the private capital ecosystem. Netley estimates the potential future market of tertiary transactions could be up to 10% of secondaries volume, just as secondaries volumes are around 10% of primary activity today.
