To what do you attribute the speed of the closing of the new fund?
I think it's a combination of the attractive results we have produced for Fund I: the fact that we stuck totally to the strategy we proposed to our initial investors, and also I think the secondaries market has matured a lot over the last few years.

What were the main differences between raising this fund compared with Fund I?
Often, it's quite tricky raising a maiden fund and can take a bit longer. We had an enforced nine month gap in the raising of our first fund – September 11 happened just before we were due to market the fund in the US – but the total actual time we spent on the fundraising process wasn't that much different from what we were used to. As to Fund II, we were delighted with the re-up level from investors in Fund I, the type of blue-chip investors we attracted and the much faster speed at which we were able to close the fund.

Did you attract many new investors?
Yes, we had a lot of interest from new investors, for some of whom it was, having reviewed the secondaries universe, their first investment in the secondaries market. The secondaries market has shown that it is here to stay and a secondaries portfolio is attractive to new investors as it allows them to generate attractive returns and see early cash flows. In the marketplace, they tend to look at teams that have been at the forefront of secondaries and who have extensive experience and know-how.

Will you be expanding the team to invest the new fund?
We recently hired French national Christophe Nicolas to join the team, bringing the team to twelve. As we go forward, particularly doing deals in Europe, we will continue to recruit Europeans with language and cultural skills – although most people speak English across the continent, it's a real advantage and you can obtain a lot more essential information if you can speak the local language.

How do you see the marketplace at the moment?
In the US, there is a lot of competition in the secondaries market and, accordingly, we're operating on an opportunistic basis there going forward. In Europe, I wouldn't say that there's no competition, but particularly in our mid-market sphere, you can still find proprietary deal flow.

Do some people still think secondaries are a fad?
No, I don't think so. There is no stigma attached to selling a secondary portfolio interest anymore. During this fundraising, not one investor asked us: “What will you do when secondaries dry up?” which a number did a few years ago. Investors recognise that the secondary market is here to stay, it's maturing very quickly, deals are becoming more complicated and more interesting.

What's deal flow like at the minute?
Peaks and troughs really. I think deal flow is positively influenced by increasing awareness of the secondaries market, but negatively influenced by general economic conditions. A lot of banks are still trying to work out what they're going to do about Basle II and may end up rationalising their portfolios, concentrating on one particular sector.

Have you noticed an increase in the number of third party intermediaries?
In the US, there's been a significant increase in the number of deals that advisers are now involved in, which can sometimes be advantageous where sellers have unrealistic expectations of the value of their portfolios. In Europe, we see intermediaries on maybe ten percent of deals. But like corporate finance advisers, paying an intermediary doesn't come cheap. A secondary deal needs to be of a certain size for an intermediary to get out of bed.

What will be your investment strategy for the new fund?
More of the same – opportunistic investment in the US and a strong emphasis on Western Europe. We won't be going into Central or Eastern Europe or emerging markets in the near term as the private equity markets aren't developed enough for a sustainable secondaries market in our opinion – we're seeing sufficient opportunities in our current market to continue investing there.