News & Analysis

Cipio raises its first blind-pool for direct secondaries

Direct secondaries specialist Cipio Partners garnered €137m in capital for its first blind-pool — short of its original target.

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Cipio partners has concluded fundraising for its sixth fund with €137 million in capital. It is the firm’s first blind pool fund, meaning LPs committed capital without knowing where it will be invested. Previously the firm presented opportunities to LPs on a deal-by-deal basis.

Cipio started the fundraising effort in late 2008, but was unable to meet its original fund target of €200 million due to the economic downturn and an unwillingness by limited partners to begin new relationships with GPs, said Cipio managing partner Tom Anthofer in an interview with PEO. “Most LPs have told us we were the only new relationship they’ve added in 2010,” he said.

With its fresh capital Cipio will continue its investment strategy of direct secondaries, in which it acquires portfolios of businesses, either from corporates or other institutional investors. The firm considers transactions involving individual assets as well as large portfolios of assets, according to its website.

The fund, which held its first close on €61 million in June 2009, secured commitments from various European and global institutional investors, family offices and Cipio itself, the firm said in a statement.

The fund, which is somewhere around 25 percent currently invested, will have roughly a three-year window for investment.

In the past few years there’s been greater deal flow for secondary direct players scouting deals in the lower-end of the market, observed Anthofer. “Venture capital and growth capital funds with 2000 or 2001 vintage years are now fully invested and in need of further financing to fully see their investments through,” he said.

Over the past few years private equity sellers have accounted for a larger share of secondary direct deals, said Anthofer.  “When we started six years ago most of our deal flow came from corporate sellers or banks, today I’d estimate 60 percent of deals now come from GPs.”

First Avenue Partners acted as the firm’s placement agent for European fundraising and Eaton Partners acted as placement agent for the US and Asia.