Greenpark in emerging markets secondaries push

The Marleen Groen-led firm won a mandate from the IFC to raise up to $500m for a secondaries fund that will target private equity in emerging economies.

Greenpark Capital has won a mandate from the International Finance Corporation to raise and manage a secondaries fund that will target the emerging markets.

The fund will have a $500 million target, and IFC, the private investment arm of the World Bank, will anchor the fund with a $100 million commitment and also share its extensive knowledge of the emerging markets with the firm. The fund will initially target more mature markets in Asia, but will expand into Latin America and Africa, according to market sources.

Greenpark declined to comment. A spokesperson for IFC also declined to comment.

The fund will be a Greenpark fund anchored by IFC, rather than an IFC fund run by Greenpark, according to a person with knowledge of the situation.

The London-based firm, led by founder and chief executive officer Marleen Groen, will build a team around the fund, expanding its 27-member group. The firm has not yet revealed who will head the emerging markets secondaries effort.

Greenpark will likely target opportunities in markets that are likely to have mature private equity portfolios, like economies in Asia, and some level of good governance practices to help mitigate risk, the person said. The firm generally targets mature, mostly fully-funded portfolios.

“In due course, they’ll look to the Middle East, North Africa, Central and Eastern Europe, it will be a global fund,” according to a market source.

Greenpark’s mid-market experience helped the firm win the IFC mandate, according to a market source.

“These guys buy in smaller ticket sizes,” one source said. “They diligence bottom up portfolio company by portfolio company, and they do that on a pan-European basis. This is what they do for a living; it’s why they got the mandate. They have that granularity and bottom-up approach across a patchwork of different markets.”

Marleen
Groen

It is understood the firm was interested in the opportunity to get a “foothold” in the emerging markets, where “the money will flow” in the future, a source said. “If you’re an LP right now and thinking about the next 20 years, what are you going to do? You’ve got to chase money into markets that are GDP heavy.”

Along with the IFC-anchored fund, Greenpark is understood to be in the process of raising its fourth general secondaries fund, and has collected more than €300 million to date.

Last year, IFC publicly revealed its plans for an emerging markets secondaries fund at a conference in Washington, DC.

The IFC believed establishing secondaries trading in less developed economies would help primary private equity markets in those regions blossom. A thriving secondaries market would allow limited partners, including those from developed nations, to have a path to liquidity, Mark Alloway, the IFC’s head of business development for financial sector in Western Europe, said at the time.

“You’re providing liquidity, and a way out,” Alloway said. “If investors know they can get out [if they have to], then they’re more likely to invest.”

The emerging markets secondaries strategy is relatively new but growing as fledgling private equity markets in developing economies slowly mature. One firm that has operated in the emerging markets for several years is Paul Capital, which has had offices in Hong Kong and Sao Paulo.