The secondaries market has come a long way since industry veteran Michael Granoff founded Pomona Capital in the early 1990s. At that time, LPs didn’t even think they could sell their interests in private funds.
“They thought: ‘You’re in, that’s it, there is no out’,” he tells Secondaries Investor. “It was a new idea, a new concept for most LPs to think about the fact that ‘maybe I have an option’.”
For Granoff, it quickly became clear that the biggest challenge to the industry was execution. Finding people to execute on deals was near impossible.
“We couldn’t recruit people with existing experience because nobody had any,” he says. Granoff set about a search for team members who could perform bottom-up, granular analysis to try to figure out how much money the fund was ultimately going to make and when it would receive it. So he looked for professionals with investment banking and direct investing experience.
Fast forward to 2019 and it appears a lot has changed in the recruitment for buyside professionals. Of the buyers who appear in our latest Young Guns of Secondaries list – due to be released next week – only a handful have investment banking or directs experience. In fact, of the total 20 finalists this year, just three have MBAs. There also appears to be no clear path towards a career in secondaries – the professionals in our list come from a variety of backgrounds including pension funds, accountancy firms and marketing. One began his career as a lifeguard.
As the market continues to evolve, these are the people who’ll be seeing it through its next iteration – in fact, many of them are driving its evolution today.
This year we have six women in the list, the highest number so far. With women representing just 30 percent of the overall private equity industry and a mere 6 percent of senior level positions, it’s encouraging to see more women being recognised. But there is still a long way to go.
Granoff’s advice for young professionals looking to enter the secondaries industry today is: stick to your values while being adaptable.
“The people who I think are the most successful are people who combine those things because they are grounded in one way,” he says. “They’re not taking risks they shouldn’t take, but they’re always open and looking for new ways to do things, thinking about the issues in a more 360-degree way. I think that’s what it takes to be successful.”
Advice worth heeding.