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Introduction

Secondary Direct Market

Why Novirian Capital?

Novirian Capital’s ESG Policy

What is the Secondary Direct Market?

Publicly-owned companies are listed on one or more exchanges, such as the NYSE or NASDAQ, and there exists a liquid market for their secondary shares. In contrast, shares in privately-owned companies are generally illiquid.

Investors in privately-owned companies are typically long-term shareholders. They sell their positions when the company has a liquidity event, either an IPO or when the company is acquired by a publicly-owned company. In the case of technology companies, and depending on market conditions, these liquidity events may take many years, sometimes beyond the life of the investment vehicles holding such investments.

In recent years, more and more private equity investors have been seeking liquidity for their portfolios, or their equity positions in individual private companies, by entering into negotiated agreements – Secondary Direct transactions – with qualified buyers, firms such as Novirian Capital.

Sellers are typically:

  • General Partners managing funds that would benefit from realizations and distributions to limited partners, or freeing up partners’ bandwidth tied to older. legacy investments
  • Banks, insurance companies, family offices, angel investors and other investment institutions seeking to reduce exposure to venture assets
  • Corporations rebalancing their portfolio of strategic investment initiatives
  • Fund of Funds implementing initiatives of proactive fund management, or solving situations of end-of-life venture funds or orphaned venture funds
  • Founders and members of management, seeking some liquidity (founder’s shares or exercise of ISOs), to enjoy the financial fruits of their labors
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