Archinvest Secondaire: a diversified strategy adapted to market conditions
Archinvest, a specialist in high-end, tailor-made private equity , is expanding its range of products and services for independent asset managers and family offices. Its latest solutions include Archinvest Secondaire. What is it, and why turn to secondary investments? Insights from Pierre-Olivier Desplanches, Managing Director and co-founder of Archinvest, and Alexandre Ortis, Archinvest Development Director.
Who is Archinvest and what is your DNA?
Pierre-Olivier Desplanches: Archinvest is a digital investment platform that enables individual investors to invest in leading private equity funds, selected by our management team, from as little as €100,000. What makes Archinvest unique is that the founding team comes from the private equity world. As for myself, I spent over 20 years in this industry, including almost 20 years with Carlyle as an investor. We know this ecosystem inside out, we know the players, we can access them and, above all, we can select them on the basis of relevant criteria. Why do we do this? Because it's a very broad environment, with over 10,000 funds worldwide, and you have to look at one team at a time. A fund is first and foremost a team, and there are many differences between them. This is what we bring to the market: the selection of the best players for our retail investors.
What strategies are you proposing today at Archinvest?
Alexandre Ortis: At Archinvest, our vocation is to offer all private equity strategies. Nevertheless, we select those that make the most sense for our investors, based on the macroeconomic context. At present, we have chosen three strategies. The first is primary LBO with Archinvest LBO 2, the successor to Archinvest LBO 1, which closed a month ago. I would like to thank all our partners who enabled us to exceed our fundraising targets for this fund. Next, a second fund, Archinvest LBO US 1, based on the same theme, but this time on the American continent. This fund invests in dollars and is therefore aimed at a specific clientele.
We also offer private debt with Archinvest Dette Privée 1, a fund designed for partners with clients with a more moderate risk/return profile. Finally, Archinvest Secondaire 1, the fund we're interviewing. This fund is currently being marketed.
Why is secondary school interesting at the moment?
POD: This is a strategy that has been developed since the early 2000s. Back then, an institutional investor had to wait for the fund to return the money before receiving cash. Today, secondary investing is based on two main principles.
Redemption of fund portfolios held by institutional investors seeking liquidity, who turn to dedicated funds.
Funds themselves, when they identify a successful company that they do not wish to sell immediately, may solicit a secondary fund to finance a so-called continuation transaction. At the moment, with interest rates rising and valuations in private equity correcting, opportunities are presenting themselves. Some funds are looking to hold on to their assets for longer, while other institutional investors need liquidity. This imbalance offers very high discounts, hence the current interest in this strategy.
See also: Why private equity rather than a stock market listing?
What are the advantages of Archinvest Secondaire for investors?
AO: For an investor in Archinvest Secondaire 1, here are the main benefits: Increased diversification thanks to a multifund comprising three top-quartile institutional managers. Diversification by sector, geography and over 5,000 companies.
Higher capital velocity, with distributions possible as early as the second year.
Finally, although past performance is no guarantee of future performance, given current discounts, this fund could target a net IRR of 15%.
Article published by Club Patrimoine November 27, 2024.
