It took Clipway just three years to raise more capital than many fund managers who have been established for several decades. This new player had one advantage: its founders already knew the market, its investors and the portfolios likely to be sold. Clipway has announced the final close of Clipway Secondary Fund I, or CSF I, at $6.4bn. The firm describes the deal as the largest-ever initial fundraising in the private equity secondary market. It now regards itself as the leading independent manager dedicated exclusively to this activity. The platform was structured in Luxembourg with advice from Arendt. Clipway is headquartered in London and has 62 professionals spread across six offices.
The fundraising round attracted 186 investors, including sovereign wealth funds, pension funds, insurance companies, endowment funds, foundations and family offices. Europe accounts for 44% of commitments, ahead of North America and Latin America at 21%, the Middle East at 18%, and Asia at 17%.
Three institutions have supported Clipway since its inception: Mubadala Investment Company, Abu Dhabi’s sovereign wealth fund; the French asset manager Carmignac; and the US group General Atlantic. Clipway does not specify their respective commitments to CSF I nor its exact stake in the fund’s capital. The company does, however, state that no single shareholder holds more than 10%.
Ardian alumni
Behind Clipway is a team made up of former Ardian executives. Its three managing partners, Vincent Gombault, Ingmar Vallano and Benoît Verbrugghe, held senior positions at the French asset manager.
Vincent Gombault joined Axa Private Equity – which later became Ardian – in 1998. As a member of the executive committee, he was in charge of funds of funds and private debt on a global basis. He had been involved in the creation and development of primary and secondary market activities, as well as in the transformation of Axa Private Equity into an independent asset manager.
Ingmar Vallano worked at Ardian for nearly 16 years. He was a senior managing director in the fund-of-funds and co-investment business. Benoît Verbrugghe headed Ardian in the United States and sat on its executive committee. Several other partners at Clipway also come from Ardian. The fund manager has also recruited former professionals from GIC, Coller Capital, Rothschild and New York City’s pension funds.
Over 6 billion transactions
The 6.4 billion will be used to invest in the secondary private equity market. Clipway does not primarily finance the creation of new funds. Instead, it buys out the stakes that investors already hold in existing funds. A pension fund or insurer that has invested in a private equity vehicle would normally have to wait for that vehicle to gradually sell off its portfolio companies in order to recoup its investment. If it wishes to obtain liquidity sooner, it can sell its stake to a firm such as Clipway. The new buyer assumes the rights to future distributions, generally at a price negotiated in relation to the declared value of the portfolio.
CSF I focuses on so-called ‘LP-led’ transactions, initiated by the funds’ investors rather than their managers. Clipway primarily targets buyout fund portfolios invested in medium-sized companies in North America and Western Europe.
The company claims to have already executed transactions worth over $6bn. The positions acquired provide indirect exposure to 1,403 companies spread across 177 funds. These are said to have been selected from over $267bn’s worth of opportunities reviewed. Two-thirds of the capital deployed is said to have been raised directly, outside of open sales processes. These figures are provided by Clipway and do not constitute audited performance figures.
Tess, Clipway’s secret weapon
The company is seeking to set itself apart with Tess, its secondary investment analysis system. According to Clipway, its database covers more than 38,500 companies and 3,400 funds. Eighteen of its 62 professionals work in data and technology. Tess is involved in identifying investment opportunities, evaluating them, monitoring investments and building portfolios. The aim is to assess funds based on the companies they hold, rather than relying solely on the overall performance figures reported by their managers.
A study published in June by Clipway illustrates this approach. The company identified 5,654 software publishers owned by private equity funds. Out of a sample of 624 companies with comparable financial data since 2022, average revenue growth fell from 24 per cent in 2022 to 10% in the last financial year. At the same time, the average EBITDA margin rose from 28% to 31.9%.
Clipway then used an AI-powered framework to assess these companies’ vulnerability to new generative tools. Its analysis distinguishes, in particular, between software that is protected by its integration into clients’ processes, proprietary data or network effects, and software that could be more easily replaced.
Clipway, on the other hand, is entering a market driven by a growing need for liquidity. The slowdown in acquisitions, divestments and initial public offerings has extended the length of time private equity funds hold onto companies. As a result, these funds are distributing the returns expected by their investors at a slower pace.
Pension funds, insurers and sovereign wealth funds are making greater use of the secondary market to sell their existing holdings, raise cash and rebalance their portfolios. According to Jefferies, the global volume of secondary transactions reached a record $162bn in 2024, up 45% year-on-year. Sales initiated by investors alone accounted for $87bn.
