News l Secondary Capital
What is Secondary Capital?
Secondary Capital is a Swiss private equity fund based in Fribourg that specializes in direct secondary transactions. It buys existing shares from founders, management and early investors of high-profile private technology and growth companies, giving them liquidity without disrupting the company or its cap table. It invests up to $50 million per transaction in companies valued above $500 million, in agreement with the company's board. Founded in 2020, Secondary Capital is a brand of PTF, Fribourg, Switzerland.
Is Secondary Capital a marketplace or a broker?
No. Secondary Capital is an investment fund that buys shares directly. Unlike a marketplace or a broker, it does not list shares or look for buyers on a seller's behalf: it is the buyer. It sources its transactions itself through its proprietary AI-driven Deal Engine and negotiates directly with sellers, without intermediaries.
Does Secondary Capital invest in new funding rounds?
No. Secondary Capital invests only in secondary transactions: it buys existing shares from shareholders and does not take part in funding rounds in which the company issues new shares. Its role is to provide liquidity to existing shareholders, not new capital to the company. It acts as lead minority investor in the secondary transactions it completes.
Who runs Secondary Capital?
Secondary Capital was founded by Cedric Abitbol and Marc-Antoine Voisard, who each have more than 20 years of experience in private equity. Before founding Secondary Capital, Cedric Abitbol was Managing Partner at 21 Invest, a European mid-market private equity firm. Marc-Antoine Voisard co-founded Flexstone Partners, a private equity platform later acquired by Natixis. The investment team has six members.
What valuation range does Secondary Capital invest in?
Secondary Capital invests in technology and growth companies valued above $500 million, globally. These are typically late-stage private companies backed by established venture capital and growth equity funds, with an expected exit through an IPO or acquisition within three to five years.
How much does Secondary Capital invest per company?
Secondary Capital typically invests between $5 million and $20 million per company, and up to $50 million. The amount depends on the size of the stake for sale and on the company's valuation. Secondary Capital can buy shares from a single seller or from several shareholders of the same company.
Does Secondary Capital have any sector preferences or geographical focus?
Secondary Capital is sector-generalist but avoids industries that are highly capital-intensive, highly volatile or outside the team's expertise, such as mobility, crypto, life sciences and transportation. Geographically, it invests in high-growth companies globally, with a particular emphasis on the United States, where most of its target companies operate.
Who does Secondary Capital buy shares from?
Secondary Capital buys shares from founders, managers and early investors of private technology companies. It usually starts the discussion with the founder, who knows the company's history and plans best and can make sure the transaction is agreed with the board from the start. Secondary Capital can also buy shares from other shareholders the founder introduces.
What type of shares does Secondary Capital acquire?
Secondary Capital acquires ordinary or preferred shares, depending on the shares the seller holds. As part of its due diligence, it analyzes the liquidation preferences of the different share classes to determine a fair price. In successful companies, liquidation preferences are typically 1x, well below the company's current valuation.
Why do founders sell part of their shares before an exit?
Founders of successful technology companies often hold most of their wealth in shares they cannot sell. With companies staying private longer, an IPO or acquisition can be many years away. A partial sale lets them convert some of that stake into cash and reduce their personal risk, while keeping most of their exposure to the company's future value.
Why sell to Secondary Capital rather than through a marketplace?
Secondary Capital is a direct buyer that invests its own capital. Sellers deal with a single counterparty that negotiates directly, keeps the transaction confidential, works with the board from the start and typically completes the transaction within three to four weeks once both sides have agreed to proceed.
Do existing investors and the board need to approve a founder's sale?
Yes, in most cases. Shareholder agreements usually allow founders to sell a limited part of their holding, subject to board approval and to the rights of existing investors. Secondary Capital only completes transactions that are both founder-friendly and board-friendly: the founder obtains board approval well before any shares are sold.
Does Secondary Capital take a board seat or ask for governance rights?
No. Secondary Capital is a passive minority investor. It believes the board and management team are best placed to run the company, and it does not seek a board seat or special governance rights. The company's governance, management and cap table dynamics remain unchanged after the transaction.
How long does it take to close a transaction?
Secondary Capital usually completes a transaction within three to four weeks once mutual interest is confirmed. The timeline mainly depends on the company's approval process, including board consent and any pre-emption period for existing investors. Working with the founder and the board from the start helps keep the process short.
What happens if existing investors use their pre-emption right?
Existing investors may have the right to buy the shares on the same terms before an outside buyer. This right is set out in the company's shareholder agreement or articles of association. Secondary Capital takes the time allowed for this right into account in the transaction timeline, from the start of discussions. To date, none of Secondary Capital's acquisition offers has been pre-empted.
How does Secondary Capital find opportunities, how can a seller contact it?
Secondary Capital's AI-driven Deal Engine reviews the portfolios of leading venture capital and growth equity funds to identify companies that meet its investment criteria, and Secondary Capital then contacts their founders directly. Founders and shareholders can also contact Secondary Capital using the website.