Lawrence Aragon

New Enterprise Associates is expanding beyond direct investing into secondaries, recently raising $468.2m for NEA Secondary Opportunity Fund.

The venture secondaries firm plans to use equity investments and structured financings, and will deploy capital via GP- and LP-facing transactions.

Primary Venture Partners ran the secondaries process to generate liquidity for limited partners in its first fund.

The VS secondaries firm's 10th flagship has closed on $1.45bn, making it 70% larger than its previous effort.

At a recent event focused on 'the future of venture secondaries', GPs and LPs shared the reasons they are so keen on the space.

The fund's strategy will take advantage of the current market setup, Irving Investors portfolio manager Jacob Sonnenberg said.

Bid prices are averaging 40% to 65% of NAV for VC secondaries, according to Industry Ventures founder and chief executive Hans Swildens.

Industry Ventures founder Hans Swildens has started to hear from LPs at risk of defaulting on capital calls from venture funds because of lack of liquidity – something he hasn’t seen since 2009-2010.

Unlike traditional VC funds, Industry Ventures Direct III will only invest in companies the firm already has exposure to through its secondary and fund of funds strategies.

Overall secondaries market volume is expected to drop by about 30% this year, according to a survey by Setter Capital.