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In this episode of VC Mastermind™, we delve into the intricacies of the secondary market with Yannick Mir, Director in the New York secondaries team at Greenhill, a Mizuho affiliate. Yannick provides a comprehensive overview of the secondary market, which was established about 25 years ago to offer liquidity to private equity assets. Last year, this market represented approximately $170 billion, serving as a powerful tool for GPs and institutional investors like pension funds, endowments, and family offices to manage their portfolios and investors' needs.

Yannick explains the different structures available in secondary transactions, including continuation vehicles, tenders, staples, secondary directs, and structured solutions. He emphasizes that continuation vehicles are the most common, allowing managers to hold onto assets longer while giving existing LPs the option to reinvest or cash out. The conversation also touches on the importance of transferability analysis and fairness opinions in these transactions. Yannick advises GPs to consider the market conditions, fund performance, and LP expectations when deciding on a secondary structure.

The discussion highlights the nuances of pricing in the secondary market, noting that discounts are not always negative but rather relative to market conditions and asset performance. Yannick also addresses common misconceptions about the secondary market and provides guidance on managing LP expectations and avoiding pitfalls during the process. The episode offers valuable insights for venture capitalists navigating the complex landscape of secondary transactions.

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The information contained in this podcast does not constitute research or recommendation from any Mizuho entity to the listener. Neither Mizuho nor any of its affiliates make any representation or warranty as to the accuracy or the completeness of the statements or any of the information contained in this podcast, and any liability therefor, including in respect of direct or indirect or consequential losses or damage, is expressly disclaimed.

The views expressed in this podcast are not necessarily those of Greenhill or Mizuho, and Mizuho is not providing any financial, economic, legal, accounting, or tax advice, or recommendations in this podcast. In addition, the receipt of the podcast by any listener is not to be taken as the giving of investment advice by Mizuho, nor to constitute that person a client of any Mizuho entity.