Seine Capital closes debut fund above target

Seine Capital, which was founded by Mantra Investment Partners’ former head of secondaries, has closed its debut fund on $180 million.

Seine Capital Liquidity Solutions surpassed its $150 million target to reach a final close last month after two years of fundraising, managing partner Fabrice Moyne told Secondaries Investor. The vehicle, which had a hard-cap of $200 million, was raised without asking LPs for an extension, he added.

Investors in the fund include a US university endowment — which represented the largest investor in the vehicle — as well as funds of funds and tertiary funds, asset managers and family offices, Moyne said.

Moyne said Seine was able to show its LPs that it had expertise in the lower end of the secondaries market, which has seen other new entrants set up shop recently.

Moyne launched Seine after he left Mantra in 2022 and was joined by Sol Zein and Chad Zidow. Zein previously held roles at Montana Capital Partners and Pantheon, and Zidow previously worked at Crestline Investors, Landmark Partners and tech-focused trading platform Beneficient, based in the US.

“We have the knowledge, we have the relationships,” Moyne said. “We’ve been executing deals [in this] part of the market for way over a decade.”

He added that the firm has raised a fund comparable to the size of those raised while he was at Mantra, which “gave a lot of comfort to the LP community”.

Mantra Secondary Opportunities III closed in December 2021 on €180 million, according to Secondaries Investordata. The fund’s target was not disclosed. The France-headquartered firm is raising its successor targeting €250 million.

Seine Capital Liquidity Solutions has closed on 10 transactions, with a further deal in the process of closing, Moyne said. It is 20 percent deployed, with the latest transaction bringing it to around 22.5 percent committed. The firm intends to fully invest the vehicle by the end of 2027, Moyne added.

The smaller secondaries market’s opportunity set

Seine Capital logs around 40 opportunities a month, or nearly 500 per year, that meet its main criteria, with Moyne estimating the firm sees a further 15 potential deals per month that don’t meet its threshold. The smaller secondaries specialist looks at between 30 and 45 transactions closely at any given time, with that number sitting at 41 currently.

The fund targets transactions that are between $3 million and $15 million in size, Moyne said. Around two-thirds of the vehicle is set to target LP-led deals, although it may do “a little bit more in LP stakes” given this is its area of focus. A further 20-30 percent can be invested into GP-led deals, with up to 10 percent going into direct secondaries deals.

On the asset class side, it has a target allocation of 50 percent to buyouts, 20 percent to growth, 10 percent to funds of funds and 5 percent each to private credit and infrastructure, with the remaining earmarked for esoteric strategies.

Geographically, 40 percent of its exposure will focus on North American and European positions, with 10 percentearmarked for other developed markets such as Australia, Japan or South Korea. The remaining 10 percent is set for investments in emerging markets.

The firm seeks positions where it has a competitive advantage: perhaps where the underlying general partner is not well known, for example, and as a consequence there is very limited competition, Moyne said. Around 30 percent of the deals it sources are proprietary, with the remaining transactions coming from approximately 150 intermediaries.

It does not seek to take smaller pieces of larger portfolios. Sellers tend to come to the firm with single LP stakes of a smaller portfolio, where Seine can cherry pick, Moyne said.

Lastly, Seine seeks to transact with sellers that are “in real need of liquidity” and, as a result, the firm prices “a lot of deals”.

“Those sellers that are more opportunistic – they typically don’t transact with us,” Moyne said.

The firm seeks to position itself as the only credible buyer to a motivated seller that can’t wait three to six months to gather additional bids with the additional uncertainty that they will get a better price, Moyne added.

To find a seller that is in need of liquidity, the firm needs to be “a little bit of a pricing machine” given the majority of the secondaries market’s sellers don’t fit that profile.

Source: Secondaries Investor