Thursday 28th August 2025
A secondary offer that both couldn’t refuse
Jeremy Coller, managing partner at Coller Capital, thought he had made Jake Elmhirst an offer he couldn't refuse. But Elmhirst came right back at him with another.
The advent of primary private equity in the mid-to-late 1990s in Australia, followed two decades later by the first private credit funds, kicked-off a slow burn in private market secondaries that now sees more than US$200 billion ($308 billion) in transaction volume per year.
While this remains a relatively small piece of the US$22 trillion ($33.8 trillion) global private markets industry – and remains small compared to market capitalisation of Australia’s public markets – the demand for private market assets will only rise, especially as the wealth market demands the same access to investments that the institutional market enjoys.
Structurally, fund managers have worked hard to create vehicles that enable this broadening of appeal. In particular, the advent of perpetual or ‘evergreen’ funds has allowed far wider access to areas of the private markets; and ‘secondaries’ investment – in both private equity and private credit – is one such area that has been galvanised by the evergreen vehicles.
Jake Elmhirst (pictured), head of private wealth secondaries solutions and deputy head of capital formation at Coller Capital, saw this first-hand, a decade or more ago.
“When I worked at UBS, in the 2010s, running the private markets business, the average institutional allocation to private markets was about 20 per cent, but it represented less than 1 per cent of wealth client portfolios. The main reason for that was because the vast majority of the private equity industry historically was in the form of closed-end funds, with a 10-year commitment period, typically limited partnership (LP) structures, very illiquid,” says Elmhirst.
“Capital gets ‘called’ when it’s being deployed, when the manager finds an investment; and then returned, when the manager sells the investment. That’s a fine structure for an institutional investor, but it’s next to impossible to operate on a wealth platform.”
The dilemma Elmhirst had to solve was how to get this kind of product into the hands of the wealth client in an efficient way, that didn’t “chew-up adviser time,” and that could fit into the operating system that exists at the banks, which had been built around stocks, bonds and mutual funds. “How we really managed to grow the business was by leaning-in to perpetual-style structures, and partnering with some of the early-mover groups. That’s really what led to the growth in wealth-market allocations.”
After a long career, Elmhirst had retired, and returned to his sheep farm in northern England, when Jeremy Coller, founder of private-markets secondaries firm Coller Capital, came to see him in 2021, with an offer he couldn’t refuse.
“I had seen a great deal of Coller Capital, I had transacted with them many times, and I was very intrigued to move to the secondaries side,” says Elmhirst. “What I saw was a leading secondaries player, with a fabulous track record, going back 35 years, and playing in a space that I thought wealth client portfolios really needed – because it brought instant diversification, and real cash flow benefits to it, because you’re investing part of the way through the life of a closed-end product most of the time. And importantly, the cash flow profile of secondaries funds lent itself extremely well to the perpetual structures.”
At the time he was recruiting Elmhirst, “Jeremy was still building conviction in the idea of perpetual structures,” says Elmhirst. “I explained to him that he was actually sitting on a massive potential opportunity. That’s what persuaded me to join Coller; I knew that the advised wealth market wanted to increase its allocations to private markets, and that Coller had on its hands the perfect vehicle to go after it.”
A private equity (or credit) secondary is a transaction where an investor buys an existing position in an illiquid private fund from another investor, typically at a discount to net asset value (NAV.) In other words, a pre-existing private debt investment commitment is sold-on to a new investor. Compared to primary fund investing, Elmhirst says the benefits of a secondaries fund include instant deployment of the capital – and buying-in to assets and portfolios at a discount to NAV, something primary funds cannot do – as well as enhanced diversification, accelerated returns, and better visibility on investments.
“Large secondaries funds typically have exposure to hundreds of underlying funds and thousands of portfolio companies, providing investors with diversification by investment strategy, geography, industry sector and fund manager,” says Elmhirst. “The shorter investment duration means less time waiting to receive fund distributions; and in some instances, the fund might be paying distributions already. And the private wealth market likes the reduction in the blind-pool risk, that investors have when they invest in a primary fund – secondaries investments are made in portfolios already substantially invested, so buyers can conduct extensive due diligence on underlying assets and actively construct their portfolios. They can pick and choose their exposure.”
The Coller Private Equity Secondaries Fund, launched earlier this year, is the manager’s first dedicated ‘evergreen’ fund for Australian private wealth investors, giving them access to a diversified portfolio of private equity investments. The fund is available on several wealth management platforms, including Colonial First State (CFS) Edge, Netwealth, Hub24, Centric Wealth, FNZ, Clearstream and Praemium. Coller has since launched the first private credit secondaries fund for Australian investors, as well.
“Having a perpetual structure and the ability for investors to enter and exit at NAV makes it much easier for individuals to invest,” says David Hallifax, head of Australia and New Zealand private wealth distribution at Coller Capital. “We wanted to fulfil a need for individual advised investors that want to increase their allocation to private markets and who want to do it through a perpetual structure,” Hallifax says. “We’ve created a perpetual structure that we can offer through wealth platforms, which is accessible at a relatively low minimum, and offers monthly subscriptions and monthly redemptions.
“Private capital secondaries evergreen funds have outperformed venture capital funds, biotech funds and growth equity funds, whether on a risk-adjusted or absolute-return basis – and with less volatility,” says Hallifax. “It’s a very attractive alternative asset class, and we’re very pleased with how the wealth market has reacted both to the story, and the access.”
James is an experienced senior journalist and editor of The Inside Network's publications.
