Private Equity Secondaries Co-Investment

“Private equity secondary transactions reached a record $130 billion globally in 2023, yet emerging markets still represent less than 5% of this volume. Our co-investment fund is strategically positioned in this underserved segment, capturing mature, cash-flowing assets at NAV discounts averaging 20%. By directly acquiring positions alongside leading secondary funds, we deliver attractive risk-adjusted returns with shorter investment durations, typically 3–4 years, in regions where traditional investors are currently underserved.”

— Kenny Kayembe

Secondary co-investments involve directly investing alongside secondary managers acquiring existing private equity positions from investors needing early liquidity. This structure offers:



  • Discounted Asset Acquisition: Typical entry points at 15–30% below Net Asset Value (NAV) due to seller liquidity constraints (source: Preqin, 2023).
  • Shorter Investment Duration: Assets acquired through secondary transactions typically have remaining durations of just 3–4 years, significantly shorter than traditional primary private equity funds.
  • Fee Efficiency: Co-investments generally eliminate performance fees and substantially reduce management expenses, improving net returns to investors.


Why Emerging Markets Represent a Compelling Opportunity

Emerging markets in Africa, Latin America, and Southeast Asia present unique advantages for secondary co-investment strategies:


  • Limited Competition: Less than 5% market penetration means fewer competing bidders, creating opportunities for favorable negotiations.
  • Increased Liquidity Pressure: Institutional investors in emerging markets are increasingly experiencing liquidity constraints, prompting attractive secondary transaction opportunities.
  • Macroeconomic-Driven Valuation Discounts: Temporary economic disruptions such as currency volatility or political uncertainties often lead to significant discounts on fundamentally strong portfolios.


FG Capital Advisors' Methodology

FG Capital Advisors actively manages an established portfolio of co-investments with leading global secondary funds. Our selection process includes:


  • Direct Asset Underwriting: Comprehensive internal analyses of portfolio companies, emphasizing conservative financial modeling and downside risk management.
  • Rigorous Asset Selection: Focus on cash-generating, mature assets nearing exit, prioritizing tangible exit strategies such as IPOs or trade sales.
  • Portfolio Risk Controls: Employing structured rebalancing and detailed scenario analyses to ensure capital stability and protect investment value.


Target Performance Metrics

Our fund aims for a gross Internal Rate of Return (IRR) between 16% and 19%, with early cash distributions typically occurring within 24 months. Historical performance indicates consistent achievement of these benchmarks due to careful asset selection and disciplined execution.


Recent Transaction Example

Recently, FG Capital Advisors co-invested alongside a leading secondary investor to acquire stakes in a sub-Saharan Africa growth fund concentrated on telecom infrastructure and financial services. Acquired at a 23% discount to NAV, more than 70% of portfolio companies were already profitable and advancing toward strategic exits.

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