Setter’s secondary platform gains traction with LPs

Toronto-based advisory firm Setter Capital has attracted significant interest from LPs for the firm’s online platform SecondaryLink, a free site that connects buyers and sellers of secondary interests.

Limited partners have found a new venue for exploring secondary opportunities: the internet.

Since August, nearly 700 “users” have joined SecondaryLink, a free online platform launched by Toronto-based advisory firm Setter Capital. In addition to connecting buyers and sellers of secondary interests, the site allows potential buyers to register their interest in a particular fund – and provides a mechanism for sellers to contact them. It also allows investors to collaborate on due diligence for a particular fund. 

“It’s not an online exchange,” Peter McGrath, founder of Setter Capital, told Private Equity International. “SecondaryLink allows investors to anonymously list themselves as buyers for specific funds and for sellers to search over 4,000 funds and connect with the relevant buyers of each fund. You can look at the profiles of others and invite them to connect and collaborate on diligence and secondaries.”

Roughly 85 percent of the site’s users to date are institutional investors, the rest being comprised primarily of agents.

“Essentially, it’s about creating a collaborative and confidential community,” McGrath said.  

Setter is not the first firm to create an online platform for secondary opportunities. But the traction it seems to be getting suggests that it may have the proposition right. Collectively, SecondaryLink members have added more than 3,000 funds to their “shortlists,” have listed themselves as buyers for 1,350 funds and have expressed a willingness to collaborate on diligence on 1,135 funds, according to McGrath.

Setter was founded in 2006 and claims to now cover more than 7,000 institutional investors and over 3,000 fund families – by which it means funds managed by a particular GP that have a similar strategy. Last month, the firm released a report estimating that secondary transaction volume during the first half of 2013 reached $15 billion, more than double the previously reported figure – and predicting that 2013 will be a record-breaking year.