Why Secondaries Alone Are Not Enough: Our Approach to Value Recovery
The growth of the secondary market has been a welcome development for LPs seeking liquidity, particularly in the current economic environment. However, in many cases, secondaries alone are not enough, especially in end-of-life funds with legacy portfolios, legal entanglements, or disinterested GPs.
Traditional secondaries players rely on discounting, purchasing LP interests at deep markdowns and hoping for residual upside. While this model works in diversified portfolios, it can break down when facing distressed, illiquid, or highly concentrated fund positions.
Cork Gully offers a differentiated solution for challenged and tail-end funds. Unlike traditional approaches that rely on continuation funds or discounted secondary sales, we leverage our restructuring expertise to optimise realisations.
We can support with:
- Advisory services: We partner with existing fund managers as a specialist sub-advisor, providing deep expertise of managing challenging situations;
- Governance enhancement: Our professionals can accept board appointments at the portfolio company level, fund level and even at the fund manager level. In this regard, we deliver operational and governance oversight, and provide restructuring support where it is most needed;
- GP interest acquisition: we may acquire the existing GP’s economic interests and control rights, enabling a comprehensive restructuring of both fund governance and a reset of the portfolio strategy;
Our hands-on restructuring/ turnaround expertise can be very effective where previously a passive approach to fund management has failed. Rather than accepting discounted exits that leave little value for investors, we actively work with fund managers and portfolio companies to deliver operational improvements and strategic restructuring to maximise investor recoveries.
Why does this matter?
- As GP or sub-advisor we can influence the governance processes and structure, to drive exits, restructure problem assets, or negotiate better terms.
- Our incentives are fully aligned with LPs. We earn fees only if we realise value.
- We bring turnaround expertise, with professionals experienced in private equity, restructuring, and asset management.
This model provides LPs with three major advantages:
- Strategic insights into the remaining portfolio
- Accelerated exit timelines delivered with a highly proactive management team
- Transparent and aligned economics
For funds where a traditional secondary transaction is unviable or unattractive, Cork Gully can step in to actively recover value. We also reduce administrative burden, legal risk, and the reputational overhang that can come from a fund lingering far past its intended term.
For LPs, we can be an effective alternative solution to a secondary transaction. Where there is value to be realised, we can help recover it through a hands-on approach, tailored to the fund’s specific needs.