STRATEGY

Middle Market Investing through GP-led Secondary transactions

New 2ND Capital invests in North American middle market companies.  We do this by structuring GP-led secondary transactions. Our goal is to find a “win-win-win” solution for the underlying investor(s), the general partner and New 2ND Capital.

MIDDLE MARKET BUYOUT & GROWTH

New 2ND Capital focuses on investing in North American middle market companies, which represent a deep and attractive universe of opportunities.

  • $10 million to $500 million transactions
  • Enterprise values of up to $500 million
  • Buy-outs and growth capital
  • All industries

CAPABLE MANAGERS

New 2ND Capital believes that performance in private equity is driven principally by people. Therefore, we focus on partnering with general partners that are capable of delivering on the strategies and value creation plans for their underlying companies.

GP-LED SECONDARY TRANSACTIONS

New 2ND Capital believes that GP-led Secondary Transactions require specialized skills and experience that are not commonly available in the North American middle-market, especially for small and midsized transactions. New 2ND Capital has completed 23 transactions through August 31, 2023.

Examples of GP-led Secondary Transactions include:

  • Spinouts
  • Secondary directs
  • Acquisitions of cornerstone positions
  • Fund restructurings
  • Acquisitions of co-investment portfolios

Value Creation

New 2ND Capital has developed a repeatable value creation playbook that we apply to every investment opportunity.

N2C Value
Creation
Playbook
Buy Quality Assets
at a Discount
to Market
Manage
Risk
Profile
Align
Structure
Accelerate
Value
Creation
Liquidity
& Exits

Buy Quality Assets at a Discount to Market

  • Middle market companies with attractive business models
  • Key sectors: professional services, business services, healthcare technology and education

Manage Risk Profile

  • Strong focus on transaction diversification
  • Partner with capable middle market GPs
  • Target companies with lower leverage profiles
  • No transaction level or fund level leverage

Align Structure

  • Meaningful GP commitment
  • Tiered carried interest structures

Accelerate Value Creation

  • Support value creation via transformational mergers, autonomous growth initiatives and add-on acquisitions
  • Value creation initiatives are typically implemented ahead of or concurrent with the GP-Led secondary transaction

Liquidity & Exits

  • Target portfolio company exits through trade sales
  • Preference for transactions that have early liquidity potential