Over the past two decades, the secondary investment thesis has evolved from a purely opportunistic strategy – bringing liquidity to fund investors seeking to exit illiquid commitments – to a more constructive strategy, in which both general partners and limited partners can leverage secondaries to better manage their portfolios and generate strong returns.
Northleaf's secondaries investment strategy seeks to provide investors with attractive risk-adjusted returns by gaining access to high-quality assets, often at a discount to intrinsic value.
Investment Approach
We construct differentiated private equity secondaries portfolios with a focus on:
Partnering with leading mid-market general partners
Acquiring high-quality, mature assets with embedded value and a clear path to exit
Leveraging our team’s expertise across the range of secondary investment types
LP-Led Secondaries
Investments in which existing limited partners in a private equity fund sell their fund interests to secondary investors
GP-Led Secondaries
Investments organized by general partners to sell specific assets from a fund into new entities backed by secondary investors
Secondaries provide investors with the potential to:
Accelerate the pace of investment and return of capital
Immediately diversify portfolios
Mitigate the “j-curve”
Enhance returns through re-pricing existing portfolio company investments
Deepen access and informational advantages when coupled with a primary fund investment strategy and co-investments
Our team focuses on negotiated acquisitions of mature fund and portfolio company interests. We look to work with existing investors seeking liquidity and GPs seeking capital for existing investments, in transactions where Northleaf has a competitive angle.
Description: Four fund interests (32 underlying companies)
Northleaf Angle: Northleaf leveraged its strong relationship with the sponsor through previous investments and knowledge of the portfolio to source and diligence the transaction.
Secondary
Project King
Active | Europe
Description: Single-asset continuation vehicle investment in a leading manufacturer, marketer and distributor of diamond sports equipment
Northleaf Angle: Investment alongside a high-quality, hard-to-access sponsor with deep sector knowledge and history with the company. Northleaf gained access to the transaction, given our expertise and capabilities in completing GP-led transactions and prior interactions with the sponsor.
