Liquid Courage

GP demand for private equity secondary solutions is more about upside maximization than liquidity, says Nate Walton, the head of Ares Management's $42 billion secondaries business. In a wide-ranging and enjoyable conversation with Liquid Courage's Joncarlo Mark and David Snow, Walton,  Partner and Head of Private Equity in the Ares Secondaries Group, talks about why his team looks for high-quality portfolios that can be tapped for further growth, and why Ares tends to avoid "rescue capital" situations. Walton, the son of basketball legend Bill Walton, also shares memories of is own athletic achievements as captain of the Princeton basketball team as well as, briefly, a professional basketball player in France.  More key takeaways from this fascinating conversation:  • The continuation fund has become a standard instrument, not an exotic one. With roughly 80% of top GPs having now used one, Walton sees the CV solution as permanently embedded in private equity's toolkit, and predicts continuation fund volume will hit records in 2026 even as traditional M&A and exit markets recover. • GP stakes and preferred financing are evolving into a sophisticated capital stack. Beyond simple equity stakes, Ares is structuring solutions using carried interest, management fees, and GP commitments as collateral, enabling succession planning, next-gen transitions, and fund-level capital formation in ways that didn't exist a decade ago. • Real assets — particularly data centers and infrastructure — are the next frontier for secondaries. Walton sees the same GP-led continuation fund logic that matured in private equity now migrating into digital infrastructure, where long build cycles and illiquid assets create a natural demand for vehicles that let sponsors retain assets and clip yield over a 10–20 year horizon. Access the full transcript on the Liquid Courage Substack: https://liquidcouragepod.substack.com/p/ares-managements-nate-walton-says #privateequity #secondarymarket #investing #liquidcourage #nba #basketball

In the booming structured-solutions segment of the private capital secondary market, “having your cake and eating it too” means gaining liquidity while also staying exposed to additional upside, say experts from Dawson Partners, Crestline Investors and Upwelling Capital. In this episode of Liquid Courage, we take a deep dive into preferred-equity solutions and NAV loans with Yann Robard, Founder of Dawson Partners, Dave Philipp, Partner at Crestline Investors, and co-host Joncarlo Mark, Founder of Upwelling Capital.  Among the takeaways: • GPs and LPs increasingly are using structured solutions as an alternative to selling to create liquidity while keeping exposure. “Let's say an LP is sitting there and saying, ‘Look, I'm over allocated. I actually like this portfolio. I don't want to sell it,’” Robard tells Liquid Courage. “They can use a solution to essentially generate liquidity, deal with their temporary over-allocation, bring them back under allocation targets, but maintain the upside. They're not selling at a discount. They're not foregoing future proceeds.” • Demand for structured solutions specifically - and secondaries generally - has surged because slower exits have left investors hampered with long-in-the-tooth assets and reduced ability to generate cash for fresh opportunities. “In a slow environment like this, you're stuck,” says Philipp. “You still have your future and current capital commitments being called, and so you're stranded because you've got to find liquidity from elsewhere.” • After years of investor education and repeat transactions, adoption of structured solutions has reached a tipping point. “It is unbelievable the power of adoption,” says Philipp. “Many people look at what Yann and I offer and think it's great but maybe don’t want to be first. But as they see more and more transactions getting printed over the last three, five, seven years with really big blue chip names, it takes a lot of that first-mover risk off.” • NAV lenders are not motivated to gain control of portfolios. Quite the opposite, says Philipp: “The biggest misconception we get is that fund-level lenders are excited about accelerating and taking over portfolios. When something goes wrong, I can assure everyone that is the furthest thing from the truth.” Follow Liquid Courage on LinkedIn #privateequity #investing #liquidcourage #secondary #liquidity

Venture capital is a massive, diverse market that has a massive, diverse liquidity problem, secondaries experts tell Liquid Courage. Employees of large, private tech companies are seeking liquidity for their shares; limited partners in venture capital funds want to be bought out; venture capitalists want to ride their winning investments further into the future while allowing investors to hop off the train. For all these challenges, the secondary market has a solution, say Matthew Ahern, Managing Principal of Knightsbridge Advisors, Andy Nick, Managing Director and Co-Head of Secondaries Capital Advisory at Piper Sandler, and Joncarlo Mark, Founder of Upwelling Capital.  Some of the key takeaways from this lively conversation: • Like other areas of the private capital market, the global venture capital market has significant “backed-up NAV” due partly to weak exit markets as well as to the propensity for venture capital investments to take as long as two decades to become viable businesses, if ever.  • The exit market for venture capital deals has eroded to the point where secondary transactions are now the second-most popular form of liquidity. • Venture capital fund performance tends to max out at year nine, after which funds on average see a steady erosion of value. This track record suggests LPs should consider selling on the secondary market when their VC fund has neared the end of its contractual life, and redeploying the capital into more promising situations. “ This might be shocking to some people, but there is conventional wisdom out there that it takes longer for venture-backed companies to really create real value and ultimately, returns for their investors,” says Mark. “But  the punchline is that this does not mean that funds that are older in the venture world create more value in the out-years beyond year nine, year ten.” • There is a difference between a VC-backed company with an impaired valuation, and an individual investment position within a VC-backed company that may have a diminished value because of where it sits in the capital structure.  • Some VC managers mark up unrealized investments ahead of a fundraise, and these marks often fail to hold when the fund interests are put up for sale on the secondary market. Follow Liquid Courage on LinkedIn: https://www.linkedin.com/company/liquid-courage-video-podcast/?viewAsMember=true

Continuation-vehicle investments are often more attractive at the smaller end of the private equity market, where capital for continued growth is scarce, GP alignment is material and exit routes are plentiful, secondary experts at Neuberger Berman, Piper Sandler and Upwelling Capital tell Liquid Courage. One key challenge with down-market CVs is that investors are simply less familiar with the many smaller managers.  "As a buyer, sometimes we see a very funny dynamic where there's less people willing to engage on those transactions, not because of the asset, but because of the manager," says  Ben Perl, Managing Director at Neuberger Berman and Global Co-Head of NB Secondary Private Equity. "They can't check the box that they know the group." Perl joins Joncarlo Mark, Founder of Upwelling,  Andy Nick, Managing Director and Co-Head, Secondary Capital Advisory at Piper Sandler, and host David Snow, in the Liquid Courage episode, "Downmarket Continuation Vehicles Have Many Upsides." Other key takeaways from this fascinating discussion: • Smaller CVs offer strategic flexibility that large-scale transactions rarely match, giving investors more ways to realize value. “They can be sold up market to financial buyers. They can be sold to strategics, and in certain cases, they ultimately could be IPO candidates," says Marks. • Downmarket CVs often attract stronger sponsor alignment because the underlying company is more central to the GP’s overall franchise. “We sleep easy knowing that what that manager thinks of when they get in bed is that company; when they wake up in the morning, what do they think about? That company," says Perl • Smaller GPs can use well-structured continuation vehicles to demonstrate the strength of their best asset, giving them a credible pathway to re-engage LPs and accelerate momentum toward their next commingled fundraise. “Continuation vehicles make a lot of sense and provide a continuum of capital for smaller managers who may not be able to go out and raise half a million billion dollars of commingled capital, but certainly can raise a few hundred million dollars for specific single asset or multi-asset CVs," says Mark. • Middle-market CVs can outsize their original funds and provide GPs with efficient capital solutions that would be harder to secure through traditional fundraising. “We’ve definitely seen that situation play out where the actual continuation fund was in certain cases 50% larger than the flagship fund that it came out of," says Nick. Follow Liquid Courage on LinkedIn: https://www.linkedin.com/company/liquid-courage-video-podcast/ #liquidcourage #privateequity #secondarymarket #investing #liquidity

Having been present at the infancy of private capital secondaries, John Robertshaw and Ryan Schlitt of Piper Sander nevertheless remain awe-struck at the continued growth of the market, they tell Liquid Courage. In this episode, Liquid Courage interviews the leaders of Piper Sandler's private capital advisory business to learn why they remain bullish on the growth of alternative investments generally and secondaries in particular. "We're in early innings in terms of all the different structures and capital that will have to come into the system in order for all of these assets to achieve distributions, find new owners, etcetera," says Schlitt. Robertshaw and Schlitt became well known to the private capital market during their years running Credit Suisse's placement agent division, which became the largest such fundraising business in the market. During that time, early exposure to clients Coller Capital and Strategic Partners (now part of Blackstone), introduced Robertshaw and Schlitt to the then-nascent demand among investors for liquidity solutions.  The duo share with Cool Vector the reluctance among some GPs in the early days of the market to grant consent to secondary transactions. Now secondaries have become mainstream tools for portfolio management. In recent years, so many companies have come under private ownership that "pure math" will require many of these to seek liquidity outside of regular-way exit channels, says Schlitt. "Basically the rigid structure of private equity funds is a structural flaw," adds Robertshaw. They discuss the rise of continuation vehicles (CVs) and why these structures will not come to replace traditional exits. They also discuss the increased participation of private wealth channels in alternative investments, and the need for liquidity solutions that come with that evolution.    Follow Liquid Courage on LinkedIn: https://www.linkedin.com/company/search-party-channel/

When should you sell your interest in a private equity fund? Around year nine, according to new research from Upwelling Capital. Allow Liquid Courage to explain.  This fascinating conversation among secondaries market insiders includes Ryan Binette, Managing Director and Co-head of Secondary Capital Advisory at Piper Sandler, Tom Kerr, Managing Director and Head of Secondaries at Hamilton Lane, Joncarlo Mark, Founder of Upwelling Capital, and David Snow, veteran financial journalist and host of Liquid Courage.  The topic: "Tail-end funds" - private equity funds that have reached a level of maturity at which point investors must decide whether to stay committed to the limited partnership or to sell their interests in the secondaries market and redeploy the capital - even if selling means taking a discount. The Upwelling research findings are clear: sell at a discount and redeploy.  Among the findings discussed in this episode of Liquid Courage: • Private equity fund values tend to max out at nine years, then begin to decline • The weaker the fund performance, the earlier the valuation peak • Selling at at discount beats hold-and-pray, even after only a few years • LPs have a “selling window” during which they can sell a fund interest and achieve relatively similar long-term results • You should probably sell before the value of your distributions equals the total value of your investment “I don't think anybody initially thought that these particular funds would go out 15 to 20 years. It's definitely a concern for certain investors.” - Ryan Binette, Piper Sandler "The key for the investors to understand is you have to think about the opportunity cost of not selling positions, as opposed to, what is the discount that I'm gonna take?” - Joncarlo Mark, Upwelling Capital “There's definitely funds that are back into the nineties that are still going. We at Hamilton Lane invested in a fund in 1996 that liquidated in 2022." - Tom Kerr, Hamilton Lane Follow Liquid Courage on LinkedIn: https://www.linkedin.com/company/liquid-courage-video-podcast Access the Upwelling Capital report, "No Country for Old Funds:" https://upwellingcapital.com/wp-content/uploads/2025/07/No-Country-for-Old-Funds-Summer-2025.pdf #liquidcourage #privateequity #secondaries