Somerville: Sell Secondary Stakes in 1.5-2x Assets, Hold 3-5x Growth Assets
Hunter Somerville · Hunter Somerville: Biggest Mistake LPs Make; Deep Dive into Secondary Markets | 20VC #985 · 20VC with Harry Stebbings · Mar 4, 2023 · at 33:22
Hunter Somerville, Partner at StepStone Group, advises venture capital fund managers on how to selectively prune portfolio exposure in secondary markets based on expected remaining upside.
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“For me, I would look at the portfolio If there are assets that you really like, but you feel like are higher priced and offer maybe you know, one and a half to two X kind of arbitrage off of whatever last round prices, I would think about pruning some level of that exposure and riding the rest forward. If it's companies that are still very fully priced, but you think there's, you know, three to five X potential from here, I'd probably be less interested in doing anything around seeking secondary on that.”
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