Why discounts don’t matter

Through our discussion with Paul Newsome, Ralph Büchel, Anton Steidl and Nick Kavanagh, we found that headline discounts hardly say anything about a secondary deal. Indeed, there are many other factors which are important when executing a high quality secondaries strategy including the following:

1. Be an insider. It’s very important to have a deep understanding of what you are buying. Secondaries investors who have a primary platform and existing GP relationships have a key advantage.
   
   

2. Don’t shy away from concentration. Concentration and quality often go hand in hand and it requires a team who can do true bottom up underwriting.
   
   

3. Focus on what investors want: DPI generation and consistent returns. Discounts can be nice window dressing, but the real metrics for investors are other things:  quick deployment, DPI generation, low volatility and consistent returns across a very dynamic and rapidly changing secondary market environment.