India’s apex industry body for alternative assets, the Indian Venture and Alternate Capital Association (IVCA), held the IVCA Secondaries Conference on 20th July 2023 in Mumbai, in association with Goodwin and Khaitan & Co. Through this conference, IVCA aims to educate Indian fund managers about the potential benefits of engaging in secondaries transactions, an evolving asset class providing much needed liquidity to fund managers and accelerate the growth of the secondaries market in India.
IVCA’s Secondaries Conference Sets the Stage for New Investment Horizons in India’s Rising Secondaries Market
Rajat Tandon, President, IVCA, said, “Investors seeking growth opportunities should consider capitalising on the untapped potential of the secondaries market in India. Secondary transactions will be a catalyst this decade for PE-VC activity in India by facilitating liquidity, attracting new investors, optimising portfolios, enabling exits, and expanding the deal pipeline. These transactions will play a crucial role in sustaining the growth and development of the Indian PE-VC ecosystem.”
In the global financial system, secondary transactions have emerged as an attractive investment option, providing fund managers with quick access to liquidity and the flexibility to adjust in their investment portfolios. Considering the vast pool of dry powder available and revisions in start-up valuations, as well as with a number of funds nearing end of fund life, the Indian fund management landscape is expected to witness an increased prevalence of secondary transactions this year.
Gregory Barclay, Partner and Chair, Singapore Office, Goodwin, said, “In light of historic levels of secondary fund dry power, macroeconomic conditions, and greater market acceptance we expect the volume of GP-led fund restructuring transactions in Asia generally and India specifically to continue to increase over the coming years. The complexity of the related commercial, legal, regulatory and tax issues makes it an exciting area for us to advise GPs and secondary buyers alike.”
Secondary transactions in India represent a compelling investment opportunity, and by recognising and capitalising on their advantages, limited partners and financial sponsors are expected to continue utilizing the secondary market in 2023 as generating liquidity remains a key focus of investors.
Divaspati Singh, Partner, Khaitan & Co said, “As the alternatives industry matures in India and private commitments rise, a burgeoning secondaries market becomes imminent for the continued growth of the industry. Liquidity is ofcourse the driving consideration behind secondaries. Whether it is the investors wanting an earlier liquidity or the fund not having to rely solely on IPOs, secondary transactions can act as the bridge between LPs and funds wanting liquidity for their assets and incoming investors looking for access to identified assets. With SEBI closing the window for funds to extend their life beyond the originally stipulated term, secondaries could be the real saviour for such funds,” said,
The IVCA Secondaries Conference session shed light on various aspects of GP-led secondaries in India, such as key commercial and regulatory considerations, emerging themes and challenges, and taxation. Industry experts Vivek Mimani, Partner, Khaitan & Co, and Divaspati Singh, Partner, Khaitan & Co, shared insightful observations on the evolution, considerations, and challenges of GP-led secondaries in India. Dominic Wong, Counsel, Goodwin, and Manish Ranjan, Counsel, Goodwin explored international trends in secondaries and their relevance for India. Neha Grover, Regional Lead-IFC, South Asia Funds Group, International Finance Corporation, & Bijal Ajinkya, Partner, Khaitan & Co, participated in an illuminating fireside chat at the conference. The event concluded with a stimulating discussion on the future of and expectations for GP-led secondaries, in which Alok Gupta, Head of India, Foundation Private Equity; Dominic Goh, Managing Director, HarbourVest; Peter Lui, Executive Director, LGT Capital Partners; Norbert Fernandes, Director, TR Capital; Siddharth Shah, Senior Partner, Khaitan & Co; Nitin Agarwal, Managing Director, TPG NewQuest; and Gregory Barclay, Partner, Goodwin, shared their views and projections.
Indian Venture and Alternate Capital Association (IVCA) is a not-for-profit, apex industry body promoting the alternate capital industry and fostering a vibrant investing ecosystem in India. IVCA is committed to supporting the ecosystem by facilitating advocacy discussions with the Government of India, policymakers, and regulators, resulting in the rise of entrepreneurial activity, innovation, and job creation in India and contributing towards the development of India as a leading fund management hub. IVCA members are the most active domestic and global VCs, PEs, funds for infrastructure, real estate, credit funds, limited partners, investment companies, family offices, corporate VCs, and knowledge partners. These funds invest in emerging companies, venture growth, buyout, special situations, distressed assets, and credit and venture debt, among others.