Unigestion is back in market with its fourth dedicated secondaries fund and expects to hold a first close in the fourth quarter, Secondaries Investor has learned.
The Geneva-headquartered fund of funds launched Unigestion Secondary Opportunity Fund IV in the first quarter, according to Unigestion’s head of investment management Paul Newsome. The fund will follow a similar strategy to its predecessor, focusing on the smaller end of the market which is less competitive.
“Compared to the US, funds in Europe currently tend to be more conservatively valued,” Newsome said. Unigestion also prefers the smaller end of the market because auctions can be avoided, he added.
Secondaries Investor understands the target to be €300 million.
The firm’s predecessor vehicle, Unigestion Secondary Opportunity Fund III, is about 85 percent deployed, Newsome said. Fund III, which closed on €180 million, has invested about 25 percent of its capital in three GP-led deals and the firm is looking at a fourth, Newsome said.
Investing in the smaller end of the market in deals between €10 million to €25 million requires a high amount of due diligence and a focus on quality assets, according to Newsome.
“We believe that the best, most consistent returns from secondaries come from portfolios of the highest quality companies. However, for these, you have to be prepared to pay close to par,” he said.
Around 60 percent of Unigestion‘s almost $20 billion in assets under management is in separately managed accounts, and many secondaries deals from Fund III also used capital from these separate pools. Fund IV’s target is higher because the firm now executes most of its deals from one main fund.
The firm’s geographic split is about 40 percent to North America, 40 percent to Europe and the remainder to Asia, Newsome said.
Unigestion was founded in 1971 and has eight offices in North America, western Europe and Asia, according to its website.