with Alberto Chalon, Founding Partner at Giano Capital
EUVC Academy · 40m · Portfolio Management, Fund Strategy
Secondary transactions involve the sale of existing shares in private companies, enabling liquidity without new capital entering the business. They matter as time to exit has extended, increasing the need for interim liquidity for founders, employees and investors.
This session focuses on direct secondaries, where investors acquire shares in single companies from founders, employees or early investors, and contrasts them with GP-led and LP-led secondaries. It explores how these transactions are sourced, diligenced and priced, with a focus on European market dynamics, founder alignment and growth-driven valuation.
Key Learning Points
Types of secondaries and focus on direct transactions
Secondary markets include GP-led, LP-led and direct secondaries, each with different structures
Direct secondaries involve acquiring shares in a single company rather than portfolios or fund stakes
Single-asset transactions can allow more detailed diligence and pricing compared to portfolio approaches
Liquidity dynamics and market relevance
Low realised returns despite strong paper performance can create pressure for liquidity
Secondary transactions enable interim liquidity without forcing premature exits or IPOs
Low DPI can create challenges for fund perception and future fundraising
European execution and relationship-driven access
Access to information is gated by company cooperation, limiting the ability to initiate transactions
Transactions depend on alignment across founders, boards and shareholders to reach completion
Relationship-building functions as a prerequisite to access, diligence and deal execution
Pricing, returns and investment approach
Returns are driven by company growth rather than discount-based entry
Valuation is derived from financial performance and applying multiples to determine price per share
Base case assumptions are set below the bull case in this approach
Target returns are defined as ~3x over a ~4-year holding period
