However, not all investment strategies in the secondary market are the same or have the same risk/return profile. Altamar’s approach focuses on attractive returns with minimum risk while keeping a vigilant commitment to capital preservation, through a niche strategy, an appropriate structure, and proven experience based on discipline and analytical rigor.
For a long time, the secondary market represented a residual percentage of global Private Equity activity, responding to specific liquidity needs from the seller side, and with a fundamentally opportunistic approach from the buyer side.
However, during the 2010s, and especially in recent years, this market has experienced major development. It has become a more mature and transparent market, where sellers come to reorganize their portfolios and meet regulatory requirements. Similarly, buyers are beginning to perceive it as a tool that helps them to complement investment strategies in the primary market, or start alternative assets investment programs in a more accelerated manner.
Provided that the investment strategy in the secondary market is appropiate, the acquisition of more “mature” funds with high visibility not only enables shortening the investment term, but also mitigates J-curves and improves the portfolio risk/return profile.
Across all its funds, the Altamar Group has developed a secondary market investment strategy with a very selective profile and a flexible approach that is always adapted to the economic cycle, with the clear objective of optimizing the risk/return ratio.
Deal sourcing is focused on small or medium size deals, mostly non-intermediated and in many cases with a certain complexity of structure. This approach differs from the large fund managers in the market, who focus on high-volume transactions, usually originated through auctions and with returns coming from the use of leverage, which increases the investment risk.
The Altamar Group has proven experience in this market, carrying out transactions complementarily to the primary investments, through all its vehicles, and particularly in an exclusive manner via the Altamar Secondary Opportunities IV Fund and Altamar Secondary Opportunities VII Fund. Consistently and across very different economic cycles, the Altamar Group has demonstrated its ability to source and access investment opportunities, being able to generate attractive returns for its investors across all funds.
Altamar integrates environmental, social and corporate governance (“ESG”) factors by implementing best market practices at all stages of the investment process. Thus, ESG factors are taken into account in the selection and analysis of investments (as part of the Due Diligence process), in the formalization of investments (by requesting ESG clauses from managers in the Side Letters and the Exclusion Policy) and in the monitoring of investments (by updating the ESG Due Diligence Checklist, analyzing the reporting on sustainability issued by managers and the ESG information collected by Altamar’s investment teams when attending their Annual Meetings).
In order to continue to provide investors with the possibility of investing efficiently in the secondary market, and with a view to broadening the firm’s global reach in the market, Altamar Capital Partners has added to its investment team with the recent incorporation of a group of successful, well-established professionals with experience in the secondary market.