London-based Connection Capital has made its first secondaries fund commitment, Secondaries Investor has learned.
Connection, which invests on behalf of about 800 high net worth individuals and family offices, committed €3 million to 17Capital Fund III, according to partner Claire Madden.
17Capital III closed on its €500 million hard-cap on Wednesday. Connection was attracted to the fund because of the low risk associated with 17Capital’s strategy. The firm provides preferred equity to LPs looking for liquidity or GPs seeking additional capital.
“The rewards for relatively low risk are particularly attractive for our investors,” Madden said. “The firm has been pioneers in terms of how they approach the market.”
Madden explained 17Capital had called Connection asking if the firm had any assets to sell. The firm did not, but was intrigued by 17Capital’s strategy.
“We can absolutely see where the demand is in the marketplace,” she said.
Connection’s fund business is relatively new – the firm was founded in 2010. It has provided clients with exposure to interesting fund strategies such as commercial litigation, venture capital and mezzanine funds.
It pools client capital together to commit to funds as a single institutional investor. About 40 clients contributed to the 17Capital commitment. The largest commitment Connection has ever made was €7 million.
Madden said the firm will start to look for more secondaries funds to commit to, as “we like that part of the market.”
Connection also has direct private equity and commercial real estate investing businesses. It invests client capital on a deal-by-deal basis in both strategies.