CVC Europe, Apax Europe and Advent Global Private Equity are among the 40 most sought-after European buyout funds on the secondaries market, according to Toronto-based secondaries advisor Setter Capital.
The firm produces a ‘liquidity rating’, which is based on a number of factors, including a fund’s popularity and number of followers on SecondaryLink, Setter’s online platform for market participants to track 7,000-plus funds and share due diligence. Setter then looks at the likely number of prime buyers and gives each ‘family’ of funds a rating based in part on the seriousness, capacity and number of interested buyers, as well as the likely ease of transfer.
“More and more primary investors are starting to consider how liquid a potential investment is,” Setter founder Peter McGrath told Private Equity International in a previous interview.
“If a fund is more obscure, not as sought-after, this potentially increases liquidity risk – [so] if you later choose to sell, you may have to wait weeks or months for bids, and those bids may be few and far between. This ultimately would diminish negotiating power.”
Of its top-40 European buyout funds list, Setter rated 18 funds as ‘excellent’ and 22 as ‘very good’.