Palico, a firm formed by placement agency and secondary broker Triago’s chief executive Antoine Dréan, has created a novel online platform that it believes will make fundraising easier for limited partners and general partners.
Palico provides an electronic broker-dealer market for the “full range of private equity fund investment options”, including fundraising, secondaries and co-investments, according to a statement from the firm. The platform will allow GPs, LPs and advisors to network and engage with each other. Those using the system would pay a flat, annual subscription fee.
Because Palico is a licensed broker/dealer, GPs using the platform can present investment opportunities to LPs using the system, according to spokesperson David Lanchner. Significantly for LPs, they can stay anonymous while exploring opportunities posted on the system by GPs, he said.
You still have to kick the tires, but you can avoid a lot of wasted time by using this tool.
Perhaps the biggest advantage of the platform is to save “wasted time”, Lanchner said. LPs and GPs are being squeezed on costs and human resources and anything that can ease that burden is welcome, Lanchner said.
A lot of preliminary exploratory work on investment opportunities “can be done from your desk” through the Palico platform, Lanchner said. “You still have to kick the tires, but you can avoid a lot of wasted time by using this tool.”
Another aspect of the platform is that it can serve to unite LPs and GPs from far-flung places – an important factor in the industry today, when people are “going further afield for investment opportunities”, Lanchner said.
Palico’s platform differs from several other electronic marketplaces that only work on secondary opportunities. While secondaries are a part of Palico’s offering, the primary fundraising aspect makes the platform different.
The system will give LP users a “dashboard” tool that will provide access to a news digest, view GP communications and invitations to meet, as well as compare GP teams, access private placement memorandums
GPs will be able to promote opportunities “without restriction”, according to a statement, including PPMs and marketing materials, discover the identity of potential investors in exchange for giving them access to confidential investment documents and send short message to the community of LPs and gatekeepers who have declared an interest in a certain strategy.
Dréan will be joined by former Triago general counsel Cédric Teissier and Catherine Barratt, who ran European, Middle Eastern and African sales at S&P Capital IQ prior to joining Palico.
It remains to be seen how successful the firm will be; however, the environment would appear to be ripe for a tool to ease the fundraising process at a time when LPs are burdened with a flood of funds in the market, and GPs have to scramble to get their investment vehicles in front of interested parties.