Swiss multifamily office Ibex Capital Partners is planning to establish a $200 million fund targeting secondary equity buyouts in Asia.
The fund will initially focus on China and India, although the firm also highlighted Southeast Asia as a region with promising possibilities.
Ibex Capital Partners, which has focused on traditional asset classes such as bonds, gold, and real estate, is introducing the fund due to an overwhelming demand from its clients which comprise affluent families and corporations.
Secondary buyouts have been popular in the US and Europe for the past five to ten years, increasingly becoming the main method for founders, early employees, and early investors to exit their positions.
“The thing about the startup life cycle is that it can be extremely binary. If you were an early employee at a unicorn company, you might have fully-vested equity worth millions. But still, this value is locked up — in most cases you’re going to have to wait for six months after the IPO before you can get liquid,” said Ibex Capital Partners investment manager Henry Prabowo.
As startups in Asia are choosing to stay private longer and IPOs do not happen as often, Ibex Capital Partners hopes to provide an additional source of liquidity for those who wish to cash in early, he added.
Over the past three years, Ibex Capital Partners was able to take positions in unicorns such as Airbnb, Postmates, and Deliveroo. These were all acquired from early employees and investors in the secondary markets, delivering significant returns when the companies went public.
In one case, Ibex bought out a former executive’s stake at a 22% discount. Ibex Capital Partners executive vice president Ralf Rickard Dabrant said the former executive was renting a one-bedroom apartment in San Francisco, even after the company became a decacorn.
“As a result of our buyout, her life changed — she received a windfall of over $8 million and suddenly had an array of options at her disposal. This was a win-win outcome for all parties involved,” said Dabrant.
Established in 1962, Ibex Capital Partners was a family-owned advisory firm for over four decades. In response to increasing demand for alternative investment strategies, the firm restructured itself in 2009, recruiting a diverse team of new professionals.
Today, the firm offers services in the areas of private equity, venture capital, ESG investing, and cryptocurrency to over 500 families and corporations.