The Access Fund was Salica’s response to the insight that mid- to late-stage venture in Europe represents one of the largest accumulations of invested capital without a properly functioning secondary market.

The increasing maturity of primary venture capital markets and the appreciation that building valuable companies takes time and patience places a premium on the provision of secondary liquidity to enable capital flows to recirculate at all stages of the market.

For founders in particular, secondaries are an opportunity to clean up cap tables and prepare companies for further funding rounds. The Access Fund is a fundamentals-driven strategy focused on identifying the very best companies in the mid-stage venture market and then utilising direct secondary deals to maximise access.

By targeting the stock of equity in every company rather than just the significantly more limited flow of new issuance, the Access Fund benefits from an ability to deploy capital quickly and broadly. Entry can also be timed more optimally around capital raises or strategic milestones to focus investor capital into the sweet spot of value creation for these companies. By entering at these points, exit opportunities are likely to emerge relatively quickly, ensuring a shorter pathway to returns for investors.

Over the last five years, the Access Fund has developed a proprietary database containing a consistent set of pre-due diligence metrics for over 4,000 companies. This serves as the foundation for targeting companies with attractive prospects, enabling the fund to compare performance across sectors, geography, and stage and build profiles of those companies most likely to succeed in the future from the example of companies that have succeeded in previous years. This database underpins our origination activity which is predominantly off-market and unique to the Access Fund, as we focus on building relationships with the companies first and sourcing potential deals and supply after that connection has been established.

Where the Access Fund targets individual companies and sellers, creating a portfolio from these different situations, sometimes portfolios become available as a single bloc. These situations always differ but the common reasons for portfolio sales can often be traced back to strategic change at the backers, funds running beyond their initial horizon or management change in the backer or the target fund.

Salica has successfully executed transactions in this space both by bringing on board funds with expert managers but also by acquiring portfolios of companies and using its own portfolio and exit management capability to drive and value and realizations.

We view portfolio secondaries as an important complement to our Access Fund activity. Access Fund benefits from a consistent flow of investment opportunities. Portfolio secondaries by definition are less predictable but can represent excellent solutions both for buyers and sellers who, for whatever reason, are no longer perfectly aligned.