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Secondcap is the provider of a global independent online platform for transaction management in the private equity secondary markets. The company has created SecondaryNet, the first independent Transaction Management System for the transfer of LP Interests. SecondaryNet is backed by a number of global Limited Partners who seek a more efficient and cost-effective way of finding best execution by sourcing the most relevant buyers, conducting NDA process, entering a secure data room and running an auction process - all on one integrated platform.

Secondcap is headquartered in the city of London, UK and has a presence in the USA, with an office in New York. Secondcap Ltd is Authorised and Regulated by the Financial Services Authority and Secondcap America LLC is a member of FINRA and SIPC.

Company history
Secondcap Limited was founded in January 2010 in London, UK. It started its operations in the USA by opening a New York office in March 2011. A beta version of SecondaryNet was launched in May 2011 and included over $150 Mn of dealflow with a further $1 Bn in the pipeline. By September 2011, users of the platform had closed four transactions including fund interests from the EU, US and Asia.

SecondaryNet
The private equity secondary market is expected to grow substantially over the period 2010-14 (CAGR of 16%) with around $20bn in secondary dealflow predicted for 2011. Inefficiencies in this market are well documented with recent reports of actual transaction volume ($20 bn) for 2010 being one-third of total secondary opportunities being sourced ($60 bn). . Market observers believe that a shift in practices and market dynamics has taken place in the secondary market with participants being driven by a value-based and opportunistic approach to secondary transcations instead of a last resort liquidity based approach in times of distress. The buyer population for single-fund interests has increased exponentially over the last few years with the inclusion of non-secondary specialists and primary focused investors. .

Secondcap's online transaction management platform, SecondaryNet, is targeted at unlocking this growth potential of the secondary market. It brings together a network of GPs, buyers, sellers and intermediaries to provide a best practice platform where users can achieve faster, cheaper and more professional deal execution. It aims to provide optimal pricing by matching specific assets with the most relevant buyers using its network of buyers with diverse profiles and appetites. SecondaryNet distinguishes itself from earlier attempts at creating a trading platform for secondary markets by providing an end-to-end solution for the transactions; from matching the sellers with the buyers (with pre-approvals), providing a virtual data room for due diligence and signing of Non-Disclosure Agreements (NDAs), execution of sale and purchase agreements and closing of deal with GP approval.

Secondcap expects 20 percent of the secondary market dealflow to take place through SecondaryNet within the next four years, with investors from Europe, US, Asia and Middle East already signed up on the platform.

Limited Partners (LPs)
SecondaryNet makes it easier for private equity fund investors, known as limited partners, to trade their interests. Secondcap carries out due diligence such as KYC and AML checks before letting buyers use its platform, making sure that only qualified buyers are present on the platform. Secondcap further addresses the issue of confidentiality by allowing the sellers an option to stay anonymous and approve which buyers are allowed into an auction of one of their fund interests and by asking the bidders to sign non-disclosure agreements (NDAs). Buyers can identify a wish list of assets and gain access to a stream of customised dealflow.

General Partners (GPs)
General Partners can use the platform to diversify their LP base through a secondary transaction. GPs who understand the symbiotic nature of the primary and secondary market appreciate a more liquid secondary market, as it makes it easier to raise capital in the primary market.

Advisors/Intermediaries
SecondaryNet provides advisors with an opportunity to gain access to an increased network of buyers and sellers, increasing liquidity in the secondary market.

Market Intelligence
Using the network of LPs, GPs and the dealflow created on its proprietary transaction platform, Secondcap aims to provide accurate primary and secondary market intelligence.