Forum Capital advises on mid-market secondaries

The New York-based placement agent has acted on behalf of two mid-market firms to help diversify their ‘non-traditional’ limited partner bases.

Placement agent Forum Capital Partners has advised on two secondary transactions worth a combined $140 million.

The New York-based firm acted on behalf of two mid-market private equity funds, finding buyers for limited partner stakes in funds containing a small number of investors.

“The secondary transactions that we get involved with are typically driven by the general partners [and] these two transactions both fit that characteristic,” Forum co-founder and managing partner Robert Schwabe told Private Equity International. “Given that certain investors were seeking liquidity, we advised our clients to use the opportunity to diversify their capital bases away from non-traditional private equity investors.”

One of the secondary transactions involved a mid-market fund backed entirely by a single hedge fund in need of liquidity.  Forum found two new investors to not only purchase a $40 million stake in the fund but also provide additional capital for future add-on and platform investments.

“The general partner was able to diversify their limited partner base and move forward on their transaction pipeline,” Schwabe said.

The secondary market has previously helped hedge funds searching for liquidity sell side pockets of illiquid assets. Last year, Paul Capital agreed to a €70 million deal to buy 20 debt and equity assets from London-based hedge fund Cognis Capital.

Forum’s other secondary transaction replaced two limited partners’$100 million stake in a $700 million mid-market fund. Both transactions involved Forum targeting a shortlist of buyers with very specific characteristics, as opposed to broad secondary sales.

Forum Capital’s secondary business involves funds the firm has raised as well as firms for which it has not acted as a placement agent. In addition to private equity, the firm has placed funds in strategies related to infrastructure real estate secondaries, including Patria Investmentimentos’ P2 Brazil Private Infrastructure Fund II and Madison International’s Real Estate Liquidity Fund IV.

Forum Capital was founded in 2001 by Schwabe, a former managing director of the private equity group of CIBC Oppenheimer, and managing partner Jeffrey Stern, former head of private equity at  CIBC Oppenheimer.