Secondary Markets Lumicre Group

Secondary Markets

Opportunities In The Secondary Market

reinvestment avenues

The secondaries market has evolved into a sophisticated and indispensable component of the alternative investment landscape, offering institutional investors with stakes in areas such as real estate private equity, venture capital, or other private partnerships a unique avenue for liquidity and portfolio management.

This market refers to the trading of pre-existing investor commitments to private equity and other alternative investment funds, providing an opportunity for liquidity in an otherwise illiquid asset class, unlike primary investments where capital is directly invested in a fund by the capital group or limited partners.

Secondary Insight & More

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WHY CONSIDER THE SECONDARY MARKETS?

With an understanding of the market’s mechanics and benefits, you are well-positioned to make informed decisions that align with your investment objectives.

The Mechanics of Aftermarket Trading

Fractional Liquidity and Partial Interest

Investor A

Sellers intend to divest a portion of their partnership interests by seeking fractional liquidity for their shares.

Investor B & C

Buyers and sellers, including current sponsor, existing and new silent partners represented by Lumicre, engage in the trading of partnership interests with peers at market rates.

Institutional Investor Solutions

creative solutons to illiquid problems

DENOMINATOR EFFECT

We provide institutions the capability to execute fractional rebalancing of their illiquid partnership portfolios, where they previously only had the antiquated option to buy, sell or refinance the whole interest.

DIVERSIFICATION

Lumicre offers opportunities to acquire fractional interest in private equity, instutional quality commercial real estate, infrastructure, and distressed debt.

ADVISORY SERVICES

Lumicre’s team offers a fee-based, outside, independent valuation of your portfolio to better understand the impact of the denominator effect in your situation. This insight provides support when reporting to your investment committee and the board the impact of the market fluctuations and offers an independent opinion on the risk and benefit of rebalancing. Not all private partnership portfolios impacted by market fluctuations need to take action but may need to relax target allocations temporarily.

INSTITUTIONAL LIQUIDITY

Lumicre offers an independent evaluation of the liquidity needs at the institutional level. In the high interest rate environment, and following the mismanagement of the rise in interest rates in the banking sector, now is the time to challenge the status quo and confirm or modify the liquidity requirements at the institutional level.

The Denominator Effect can quickly turn diversification into a house of cards, as seemingly unrelated investments become interconnected in their vulnerability. In such moments, the value of true liquidity, not just on the balance sheet but in the ability to act swiftly, becomes painfully evident.

Navigating The Secondaries Market

valuation

Understanding the fair market value of your privately held interests is crucial. Various factors such as the fund’s performance, the quality of its management, and market conditions, can influence pricing.

Legal Considerations

Before proceeding with a sale, reviewing any legal restrictions or obligations outlined in the original partnership agreement is essential.

Finding a buyer

The secondaries market has a diverse range of participants, including dedicated secondaries funds, hedge funds, and other institutional investors. Identifying the right buyer is vital to a successful transaction.

Explore Your Options

If you are an institutional investor interested in exploring the secondaries market, we invite you to submit your contact information. We will reach out to discuss your partnership interests and initiate a meaningful conversation