Moonfare’s proprietary strategy on secondaries offers access to a well-rounded portfolio of secondary private equity investments, tailored for those seeking diversification and potentially more consistent returns.
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Structured as a GP-led secondary transaction, Moonfare invested in the single asset continuation vehicle managed by a leading U.S. middle-market private equity firm.
We sourced the deal through existing relationships with top-tier intermediaries who coordinated the transaction, while tapping into our network to inform the investment process.
Boosted by rising demand for liquidity and portfolio management tools, plus growing investor interest, the secondaries market has grown strongly over the past few years.4,5 And the stage is set for further expansion.
Find out moreMoonfare’s investment team has compiled several of our benchmark white papers, articles and other resources for your review.
Secondaries provide investors access to private equity investments outside the traditional fundraising cycles and add flexibility and diversification to investors’ portfolios. Secondary transactions are split between LP-led and GP-led:
LP-leds refer to the purchase of a (typically mature) LP interest in a single fund, multiple funds or entire portfolios, allowing to achieve significant diversification by gaining exposure to a wide variety of industries, sectors and GPs.
GP-leds refer to an investment into a special purpose single or multi-asset continuation vehicle set up by a GP to have more time and capital to grow the underlying asset and to generate additional value.
A mix of LP-led and GP-led secondaries offers investors diversified exposure across GPs, sectors, geographies and vintages. Secondaries have a unique cash flow and return profile, offering the potential for faster distributions and resulting in a possibly mitigated J-curve. Additionally, when investing in secondaries, investors buy into defined assets, mitigating blind pool risk in the case of LP-leds or fully eliminating blind pool risk in the case of GP-led transactions. Finally, secondaries typically allow investors to acquire assets at a discount to NAV, resulting in an immediate uptick in valuation.
Our Secondary strategy aims to combine diversification and efficient exposure with simplicity of use and greater liquidity. By combining the return profile of secondaries with an evergreen structure, we aim to offer a product that is easier to manage, offers broad diversification, benefits from the compounding effect of earlier secondary distributions and offers greater flexibility and liquidity compared to traditional closed-ended funds
Moonfare’s Secondary Strategy aims to build a well-diversified portfolio by primarily investing in a balance of LP-led and GP-led transactions, maintaining global exposure with a focus on North America and Western Europe, and diversifying across underlying asset classes with an emphasis on buyouts.
We will call 100% of your commitment upfront, allowing you to gain immediate exposure to Private Markets via one single contribution. Distributions will be automatically re-invested offering you compounding benefits and potentially accelerated NAV growth over time, as well as an efficient and simple investment experience.
The minimum investment in Moonfare’s Secondary Strategy starts at $25,000.
We leverage technology to provide lower minimums than usual, all while respecting requirements and regulations. Investment minimums depend on where investors are located and on the relevant jurisdiction.
You will be able to invest in Moonfare’s Secondary Strategy on a monthly basis. LPs will have the option to redeem, with the consent of the GP, up to a certain percentage of the total fund NAV on a quarterly basis after the expiry of a determined lock-up period1.
Liquidity and redemptions are not guaranteed, are subject to conditions and may not be eligible to all investors.
Secondaries provide investors access to private equity investments outside the traditional fundraising cycles and can add flexibility and diversification to investors’ portfolios.
Secondary transactions are often split between LP-led and GP-led: the nature of these transactions can differ significantly for levels of diversification, return expectation, transaction structure and parties involved
What is the difference between LP-led and GP-led transactions?
Secondary transactions are split between LP-led and GP-led:
LP-leds refer to the purchase of a (typically mature) LP interest in a single fund, multiple funds or entire portfolios, targeting significant diversification by gaining exposure to a wide variety of industries, sectors and GPs.
GP-leds refer to an investment into a special purpose single or multi-asset continuation vehicle set up by a GP to have more time and capital to grow the underlying asset, with the aim of generating additional value.
[indicate who is eligible to invest, and could use this space to intro users of Moonfare’s platform are permitted to invest] Within the United Kingdom, Moonfare GmbH operates through a subsidiary, Moonfare UK Limited. Moonfare UK Limited is acting as a so-called “appointed representative” within the meaning of sec. 39 of the Financial Services and Markets Act (FSMA) under the responsibility of an authorised person, its “principal firm”, Khepri Advisers Limited. In accordance with the terms and conditions, UK users of the Moonfare platform must understand and acknowledge they are not entering into a client relationship with Moonfare UK Limited. Moonfare UK Limited treat UK investors as a so-called “corporate finance contact” as defined by the Financial Conduct Authority (FCA). As such, Moonfare UK Limited will not be responsible to you for providing protections afforded to clients of the firm or be advising you on the relevant transaction. Eligible investors will vary depending on the secondaries fund however, in Moonfare’s case, those eligible to access the Moonfare platform are able to invest in all funds offered, subject to jurisdiction, minimum investment terms, and bespoke fund terms. Further information is available on Moonfare’s platform.
A mix of LP-led and GP-led secondaries offers investors diversified exposure across GPs, sectors, geographies and vintages.
Secondaries have a unique cash flow and return profile, potentially offering faster distributions and resulting in a mitigated J-curve.
Additionally, when investing in secondaries, investors buy into defined assets, mitigating blind pool risk in the case of LP-leds or fully eliminating blind pool risk in the case of GP-led transactions.
Finally, secondaries typically allow investors to acquire assets at a discount to NAV, resulting in an immediate uptick in valuation.
Market risk: the value of secondaries investments can fluctuate due to change sin the broader market conditions
Valuation risk: accurately valuing secondary investments can be complex, as it may rely on limited information, investor estimations and may not be in line with actual asset value
Illiquidity: despite offering the potential for earlier returns and distributions when compared with primary investments, secondaries investing, like all private markets investments, remains illiquid in nature
Our Secondary strategy aims to combine diversification and efficient exposure with simplicity of use and greater liquidity. By combining the return profile of secondaries with an evergreen structure, we aim to offer a product that is easier to manage, offers broad diversification, benefits from the compounding effect when earlier secondary distributions are received and offers greater flexibility and liquidity compared to traditional closed-ended funds.Readers are reminded that liquidity and redemptions are not guaranteed, are subject to conditions and may not be eligible to all investors.
Moonfare’s Secondary Strategy aims to build a well-diversified portfolio by primarily investing in a balance of LP-led and GP-led transactions, maintaining global exposure with a focus on North America and Western Europe, and diversifying across underlying asset classes with an emphasis on buyouts2.
Footnote 2: Please note that on an ancillary basis, including for liquidity management, the strategy may consist of assets other than Target Funds and cash. Moonfare may invest up to 30% in non Target Fund Investments.
We will call 100% of an investors commitment upfront, allowing investors to gain immediate exposure to Private Markets via one single contribution. Distributions will be automatically re-invested offering the potential for compounding benefits and potentially accelerated NAV growth over time, as well as an efficient and straightforward investment experience.
The minimum investment in Moonfare’s Secondary Strategy will depend on investors jurisdictions. For example, it may start at $25,000 or £50,000. We leverage technology and fund structuring to provide lower minimums than usual, all while respecting requirements and regulations.
Eligible investors wishing to participate will be given the opportunity to invest in Moonfare’s Secondary Strategy on a monthly basis. LPs will have the option to redeem, with the consent of the GP, up to 5% of the total fund NAV on a quarterly basis after the expiry of a determined lock-up period. Readers are reminded that liquidity and redemptions are not guaranteed, are subject to conditions and may not be eligible to all investors.
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¹ Minimum investment may vary by country and local regulation.
² Source: McKinsey "Private Markets Annual Review 2022"
³ Past performance is no guarantee of future returns.