How We Unlock Opportunity Middle-market PE assets are different. And so is what New 2ND Capital provides.
Established in 2016 by leading secondary and private equity veterans, and now with more than $2 billion in deals closed, New 2ND Capital is today one of the industry’s most experienced specialists in GP-led secondary transactions in US middle and lower-middle-market companies.
We bring to private equity GPs what they want and need for their high-conviction assets: fresh capital to grow the business and extend ownership for desirable holdings they might otherwise have to sell, and an exit option for existing investors who desire liquidity.
We bring to private equity GPs what they want and need for their high-conviction assets:
- Fresh capital to grow the business and extend ownership for desirable holdings they might otherwise have to sell
- An exit option for existing investors who desire liquidity
What’s different?
Private equity-held companies in the middle and lower-middle market are special—and not just because of their size. They are often businesses with some of the simplicity of smaller enterprises still remaining but with the more complex needs of larger enterprises emerging. They are often at an operational crossroads (or multiple crossroads spanning human capital, technology, product, and marketing!) with multiple alternatives for the best way forward.
Meanwhile, in the later stages of a private equity fund’s life, options for GPs and investors may seem limited, sometimes too limited in view of the next steps that their portfolio companies could take. And even midstream in a fund’s life, certain circumstances may bring a need for the GPs to add additional growth capital, realign duration, or restructure incentives.
These are the landscapes in which New 2ND Capital excels in helping GPs, LPs, and portfolio companies by offering liquidity to stakeholders who want it and by helping realign ownership structure as desired. Our partners can extend, recapitalize, and find that best path forward. With New 2ND Capital, options are not limited.
Is it complicated?
Yes…and no.
GP-led secondary transactions are complex to structure because stakeholders have widely varying needs, perspectives, rights, responsibilities, and goals. Calibrating the transaction to recognize all of those interests, and do so in a timely way with surety of close, takes specialized knowledge and experience.
That’s why most buyers in the secondary market focus on simpler, LP-led deals and typically participate in GP-led transactions only as part of a syndicate—they haven’t developed the expertise needed to structure and execute high-quality, highly targeted, middle-market GP-led transactions.
In contrast, at New 2ND Capital, we consider the middle and lower-middle market to be our sweet spot for GP-led secondaries—because we fully recognize their potential. And we’ve designed our entire firm around accessing and executing these opportunities efficiently and successfully.
So, while middle-market GP-led secondaries are complex, ultimately, New 2ND Capital can reduce complexity for GPs and LPs because we specialize in such transactions with deep knowledge and a dedicated process.
Advantages
of a representative
New 2ND Capital partnership
Transactions can be structured around one or more portfolio companies.
The GP retains control of the portfolio companies.
Underlying investors can individually choose for liquidity, roll their stakes into a new fund, or split their shares between the two options.
New 2ND Capital acts as the GP’s helpful partner, with our deep experience making the process smoother and more efficient.
After closing, portfolio companies continue to operate in partnership with the GP that knows them intimately and helped steer them to success—buttressed with new capital to help accelerate value creation.
During the life of the newly created continuation fund or other vehicle, the partnership with New 2ND Capital remains tightly aligned. And New 2ND Capital’s valuable operational resources remain available.
The result is continuity and additional strength for a PE holding that is a “seasoned asset”—well beyond the early and usually riskiest “J curve” portion of its life.
New 2ND Capital customized solutions
- Continuation fund
- Spinout
- Direct secondaries
- Fund restructuring
- Independent sponsor recap
- Co-investment (portfolio)
customized solutions
Buyout and growth-capital investments
Enterprise value typically $25M to $750M
Ideally portfolio companies that are
regional or niche market
leaders
or have that potential
$5M to $100M EBITDA
Most sectors considered
Transactions with PE firms, independent sponsors, financial institutions, family offices, endowments/