Setter Capital prides itself on being one of the world’s few independent secondary advisory firms, and during the gruelling pandemic year, the team rose to the challenge and doubled down on its core competencies. Setter increased both its execution team’s size and its research efforts to produce more insights for its clients.
Setter Capital prides itself on being one of the world’s few independent secondary advisory firms, and during the gruelling pandemic year, the team rose to the challenge and doubled down on its core competencies. Setter increased both its execution team’s size and its research efforts to produce more insights for its clients.
A J Patel, Secondaries Advisor at Setter Capital, says: “In a pricing environment in which clients were far less likely to trade, it was crucial that we improved our research function to make sure we’re adding value to clients, even when they’re not immediately transacting.”
Team performance
Setter’s performance over the last year resulted largely from outstanding individual and collective contributions across its team. “It was a challenging and unconventional year, but our team really rose to the occasion of hybrid work and was able to achieve outstanding service and execution for our clients, despite a troubled pricing and transaction environment,” Patel says.
The firm also credits its performance to having dedicated teams to serve different areas of the secondary market. The LP Solutions team works with LPs looking to sell their funds’ stakes, and a separate Fund Manager Solutions team works with GPs looking to offer their investors liquidity.
Setter plans to build on recent performance by continuing to stay true to its DNA as an independent advisor solely focused on the secondary market. It will continue to build out its team to serve the growing segments of the market, including infrastructure, private debt, agriculture and venture, plus different transaction types like single-asset continuation funds, structured secondaries, and direct portfolio sales. “Being an independent advisor allows us to be nimble and test out new areas of business,” Patel comments.
“We have learned the importance of maintaining focus on secondaries to ride out challenging periods,” Patel says. “When the secondary market dried up for much of the year, we continued to put one foot in front of the other and tweaked our approach in order to capture opportunities afforded during the down market, such as helping LPs with highly unfunded exposure and GPs to tap the secondary market for capital to shore up existing investments.”
The firm has seen a major shift in terms of the composition of the transactions completed in the secondary market, with less plain-vanilla traditional secondary deals and more GP led deals, single-asset fund restructures, direct portfolio sales, and venture capital deals.
Providing liquidity
Setter expects the secondary market to see tremendous growth over the next 10 years as private assets under management continue their meteoric rise. Market participants continue to find creative new ways to provide liquidity and unlock value across all segments of alternative investments by employing new structures to both deals and fund structures.
As both funds and direct secondary markets undergo rapid changes, Setter will continue to build out and invest in its team. “Being a secondary advisory firm is a people business and we believe it will always be a people business,” says Patel.
A.J. Patel, Secondaries Advisor, Setter Capital
A.J. Patel is responsible for originating, evaluating and leading the execution secondary transactions for direct venture capital transactions, as well as working with institutional investors seeking liquidity for portfolios and single assets. He joined Setter Capital in 2016 as a member of the Fund Manager Solutions team, advising GPs on liquidity solutions for their LPs, and has advised on fund restructures, portfolio sales, structured equity raises and other liquidity solutions for venture, private equity buyout and real estate funds. He holds a Bachelor of Commerce from McGill University and a Master’s in Finance from Queen’s University.
