We have purchased interests from a wide variety of investors seeking liquidity from the private equity interests that they own. Sellers have included institutions, corporations, endowments, family offices and individuals and have been domiciled in North America, Europe, Middle East, and Asia. We are interested in transactions of all sizes from small single interests to larger portfolios of interests. We are able to pursue a wide variety of liquidity options that can satisfy the needs of many potential sellers, including the following:

Traditional secondary: Historically, the most common secondary transaction is the sale by an investor of a limited partnership interest in an existing private equity partnership. In such a transaction, the seller has typically already funded more than 50% of its capital commitment to the underlying partnership. In these cases, PCM will carefully value the current portfolio and make a bid that can range from a significant discount to a premium relative to the fund’s Net Asset Value, depending on the valuation policies of the underlying manager, the market conditions at the time of sale, and the status of the underlying portfolio. PCM will then purchase the position at the agreed upon price and assume all continuing funding obligations relating to that position.

Young or lightly funded secondary: PCM will also consider lightly funded secondaries, generally those positions that are less than 40% funded at the time of purchase. Such positions generally have more in common with primary investments since they are by definition relatively early in the life of the underlying fund. The transaction process and dynamics are similar to traditional secondaries, though the pricing dynamics may differ somewhat because of its young age.

Portfolio transactions: PCM will consider purchasing multiple funds comprising a portfolio of interest in a single transaction. PCM will value each position separately, in the same approach as for a single interest transaction and then pool them together to create a single portfolio bid for the seller. Here again, PCM will assume all remaining capital call obligations for the entire portfolio.

Secondary directs: In some cases, investors may own direct investments in private companies, either on a stand alone basis or together with partnership interests. PCM will consider purchasing such interests and will evaluate each as a standalone investment according to its process for direct investments.

Synthetic secondaries: Where a seller owns a portfolio of direct investments, PCM will consider purchasing the entire portfolio and retaining a separate manager or management team to manage the portfolio, thereby creating in effect a new private equity partnership and firm. In some cases, such management team may already be involved with the portfolio. In other cases, PCM may recruit a team for the purpose.

Structured transactions: In some cases, a seller may seek relieve from some or all of the remaining capital call obligations of a portfolio of private equity interests, but for various reasons does not desire to sell the positions, either because the seller seeks to retain relationships with the General Partner in question or because the portfolio may be difficult to sell in a traditional secondary or for some other reason. In such cases, PCM can create a structured transaction where PCM and the seller agree to prescribed capital call and distribution sharing mechanisms that can meet each party’s needs.

Fund restructurings: PCM has worked with General Partners who have various needs that can be met via a secondary transaction, including adding capacity to a fund, changing certain partnership terms, providing a level of liquidity to some or all investors, purchasing some or some part of various positions. In such cases, creativity is an important attribute and PCM has demonstrated an ability to be responsive to General Partner and Limited Partner needs in coming up with workable solutions.

Stapled transactions: In rare cases, and in particular when a General Partner has been instrumental in creating a transaction, PCM will consider providing additional primary capital to a General Partner in conjunction with a secondary transaction. In such cases, PCM considers the entire transaction a secondary, and its return characteristics and cash flow dynamics must meet PCM’s requirements for a secondary transaction.