A few live notes from a webinar run by @TTCP_SF and @CooleyLLP for GPs:
- VC funds investing through the GFC were some of the best for vintages 2000-2019 by TVPI, esp 2008 vintage
- M&As likely delayed by 2 years from now
- Valuation cuts by 30% sets pricing to 2017 levels
👇
- VC funds investing through the GFC were some of the best for vintages 2000-2019 by TVPI, esp 2008 vintage
- M&As likely delayed by 2 years from now
- Valuation cuts by 30% sets pricing to 2017 levels
👇
Communication is key across the board: LPs-GPs-startups
Some LPs starting to look at opportunistically at selling non-core, unfunded commitments
HNW/FOs proactively seeking liquidity
Some LPs starting to look at opportunistically at selling non-core, unfunded commitments
HNW/FOs proactively seeking liquidity
GPs: if you engage in secondary position processes with new LPs, be careful what you share to avoid folks who express interest for the sake of data hoovering.
GPs typically recycling 20% of their capital.
How are GPs handling shares acquired through IPO exits? If you've hit your target public return, consider selling down to return to LPs. Helps them fund other commitments right now.
How are GPs handling shares acquired through IPO exits? If you've hit your target public return, consider selling down to return to LPs. Helps them fund other commitments right now.
Opportunities Funds? Some best practices:
- fees for admin, lower carry
- <50% the size of your main fund
- concentrated portfolios to maximise gains in the best assets
- clear allocation policy with main funds: main fund "eats first"
- don't require your LPs to allocate
- fees for admin, lower carry
- <50% the size of your main fund
- concentrated portfolios to maximise gains in the best assets
- clear allocation policy with main funds: main fund "eats first"
- don't require your LPs to allocate
Uptick in GPs asking for credit lines against Fund NAV
GPs not drawing down on existing lines of credit more than usual.
Drawdowns increased by 5%
Drawdowns increased by 5%
Fund formation stats from @CooleyLLP on the US side:
- Not too many problems for established managers who perform,
- Some established funds that were shooting for Fall fundraising have moved it up now, while others sticking to pre-COVID schedule
- Not too many problems for established managers who perform,
- Some established funds that were shooting for Fall fundraising have moved it up now, while others sticking to pre-COVID schedule
Denominator effect (exposure to specific asset class vs. allocation target) is made more difficult by extreme volatility.
Progress can be made to convert LP relationships via video conference, but challenging.
May see more multi-closing situations vs. "one and done" for LPs
Progress can be made to convert LP relationships via video conference, but challenging.
May see more multi-closing situations vs. "one and done" for LPs
VC fund terms: Too soon to tell if pandemic-driven economic conditions will impact terms.
World is coming online at a different pace: Expect formation activity levels to correlate.
World is coming online at a different pace: Expect formation activity levels to correlate.
Some predictions across startups, investors and governments from the @nvca:
Some LPs looking for liquidity in older funds to redeploy in newer funds that will be getting into deals in a lower valuation environment.
How are LPs doing due diligence nowadays?
- Now is a great time to start building relationships: more open calendars and natural human icebreaker to ask how someone is doing :-)
- A lot of benefits to diligence over Zoom: everyone in same "room"
- Probs still need in-person once
- Now is a great time to start building relationships: more open calendars and natural human icebreaker to ask how someone is doing :-)
- A lot of benefits to diligence over Zoom: everyone in same "room"
- Probs still need in-person once
That's a wrap! Ping me for slides +/- recording.
