Inside small-market secondaries-focused Seine Capital’s strategy

Mantra Investment Partners’ former head of secondaries Fabrice Moyne has launched a new secondaries shop, which is eyeing a first close for its debut fund.

Paris-headquartered Seine Capital is targeting $150 million for its inaugural secondaries fund, sources familiar with the firm’s plans told Secondaries Investor and affiliate title Buyouts. The vehicle, which is capped at $200 million, is targeting a first close on about $50 million by the end of June, the sources said.

The firm is led by Fabrice Moyne, managing partner, and partners Chad Zidow and Sol Zein. Moyne departed Paris-headquartered buyer Mantra in 2022. Sol Zein, a former Secondaries Investor Next Gen leader, has held roles at Montana Capital Partners and Pantheon, and Chad Zidow previously worked at Crestline Investors, Landmark Partners and tech-focused trading platform Beneficient based in the US.

Seine Capital focuses on the uncrowded, lower end of the secondaries market targeting high-quality assets at deep discounts – often at over 35 percent, Zein told Secondaries Investor.

It will invest ticket sizes of between $3 million and $15 million in opportunities within funds that are between $150 million and $750 million in size, according to a marketing document seen by Buyouts.

The fund has an eight-year term with a 2.5-year investment period and management fees of 1.5 percent during the investment period that step down to 0.50 percent on invested capital on any extensions, the document said. The carried interest rate is set at 15 percent after an 8 percent preferred return.

Seine is offering incentives for early backers: first-close investors are offered a 12 percent preferred return and preferential rights on co-investments, the document said.

The firm completed two deals so far using special purpose vehicle structures with capital sourced specifically for each transaction, the source said.

‘Opportunistic and flexible approach’

Seine Capital’s strategy has an “opportunistic and flexible approach across all secondary structures and strategies” only excluding investments in real estate and oil and gas, Zein said.

The majority of the fund’s capital, around 70 percent, will be focused on LP sales, with the remainder for GP-led deals and direct secondaries, the document seen by Buyouts said.

The vehicle will invest globally with 90 percent coming from developed markets with the remaining 10 percent to be invested in emerging market opportunities, Zein explained. Around half of the vehicle will focus on buyout strategies with a planned 40 percent to be deployed across growth, fund of funds, private credit and infrastructure and the remaining 10 percent to be deployed into opportunities within esoteric strategies such as music royalties and pharma royalties, litigation finance and aircraft leasing, he added.

Seine Capital will seek out single-fund and concentrated portfolios typically not exceeding five different funds. In many instances, the firm anticipates it will be able to cherry pick in its transactions, Moyne told Secondaries Investor.

The firm is also seeking transactions that are DPI-accretive within three years at the deal level “without exception”, Moyne said. “If we look at a transaction that can do 4x, but there’s no liquidity for, say, four years, we will not even consider the deal for that risk.”

The fund does not use leverage, both at the fund level and the deal level, Moyne and Zein added. “That’s key to what we do,” Moyne said.

The fund will also seek to back continuation funds that do not exceed $100 million where it is a sole buyer or with two or three other buyers within the CV, Moyne explained.

It will seek out transactions where sellers are looking for speed in execution in order to achieve the returns it seeks, Zein said. Such transactions are less likely to be intermediated or will be intermediated by a smaller adviser.

“Our competition is the seller not selling. That’s our main competition,” Zein said. “Obviously, we’re operating in a market with inefficiencies which are relatively high.”