Kline Hill Partners

Thrilled to be featured in Preqin Preqin’s latest piece by Shaun Beaney on the evolving secondaries market. https://shorturl.at/0PXRj At Kline Hill Partners, we’ve deliberately built our platform around smaller deals—typically under $20M for limited partnership portfolios—because that’s where the real opportunity lies for the vast majority of LPs who don’t sit on nine-figure portfolios. Liquidity solutions shouldn’t be reserved for the largest institutions only. For continuation funds, we lead transactions in single asset deals that are typically smaller than $250m which is also much smaller than where most of the industry focuses. We closed over 150 of these deals last year while the broader market continues its explosive growth (now north of $220bn annually, yet still just ~2% turnover of private equity assets). The conversation with Shaun Beaney covers why smaller secondaries and GP-led continuation vehicles are shaping the future of the industry, our expansion into Europe, and the structural tailwinds that are only accelerating (eg in recent years over half of all LP sellers are first time - groups that are sure to repeat this process in the future). Would welcome your thoughts—especially if you’re an LP or GP navigating liquidity in today’s environment. #privateequity #GPled #Secondaries #AlternativeInvestments

Just read a fascinating article in The Wall Street Journal on how publicly traded Business Development Companies (BDCs) are trading at meaningful discounts to their stated net asset value (NAV). These BDCs publish official NAV figures, yet the public markets consistently apply a haircut—reflecting a more cautious view of the underlying assets. One big advantage of this structure? Real price discovery (well relatively real perhaps). Buyers and sellers come together in a neutral market, generating genuine liquidity and transparent signals that private vehicles often lack. What’s especially interesting is how widely discounts vary across BDCs. The market differentiates based on conviction in the underlying portfolios, management quality, and other factors. And when the share price becomes particularly attractive, the groups running the BDC often step in to repurchase their own shares. Given their deep knowledge of the assets, that’s a powerful signal. This dynamic has strong parallels in the private equity secondary market. We’ve seen secondary fund pricing flag issues well in advance—for example, some years ago certain Carlyle funds traded down noticeably before broader challenges emerged at that firm (and their strong secondary practice has since helped them navigate it). At Kline Hill Partners, we regularly share our insights on secondary fund pricing—along with our broader market knowledge—with our limited partners to help them evaluate both existing commitments and new opportunities into the private equity funds that we cover. Kline Hill has transferred almost 4,000 fund interests in over 1,000 managers and so we have a very broad and deep view of the market. One area I’ll be watching closely: what happens to 40 Act and other evergreen funds that have already seen substantial investor withdrawals beyond the 5% gates they planned for—often with limited public visibility into asset performance or transparent market signals. This has occurred amid relatively mild market turbulence. A more significant downturn could put real pressure on these structures. What are your thoughts on valuation transparency in private credit versus traditional PE? Have you seen similar dynamics in your portfolios? Link to the WSJ article: https://lnkd.in/e5F_fX-h #PrivateCredit #PrivateEquity #Secondaries #BDC #AlternativeInvestments

Thank you The Secondary Brief for the spotlight on our latest VC secondaries fund close! 

We’re excited to announce the successful fundraise for Kline Hill Cendana Partners Fund II L.P. (“KHCP II”) at $400 million as covered by Secondaries Investor today. The oversubscribed fundraise is a testament to Kline Hill's and Cendana’s successful strategy and partnership approach to acquiring limited partner interests in mature early-stage venture capital funds. Kline Hill’s deep domain expertise in secondaries and Cendana’s focus on very early-stage VC funds enables KHCP II to access, identify and invest in smaller, less competitive secondary transactions. Read more here (paywall): https://lnkd.in/gcNk7nBi #KlineHill #secondaries #venturecapital #fundrais

An insightful read in today’s Wall Street Journal on why publicly traded BDCs continue to trade at meaningful discounts to their stated Net Asset Value (NAV). https://lnkd.in/e5F_fX-h While BDCs publish an official NAV each quarter, the public markets assign a very different — and often lower — value. That market-driven price reflects real-time buyer and seller conviction and, importantly, delivers genuine liquidity — something many private vehicles lack. What’s particularly interesting is how widely these discounts vary across BDCs. The market clearly differentiates based on the perceived quality of the underlying assets, management track record, and overall strategy. When the discount becomes especially attractive, many BDC managers step in and repurchase their own shares — a powerful vote of confidence given their deep knowledge of the portfolio. This dynamic isn’t unique to BDCs. We see similar transparency in the secondary market for private equity funds. For example, Carlyle private equity funds funds traded down well before some broader challenges became public — valuable early signals for sophisticated investors. At Kline Hill Partners, we regularly share our secondary market insights (and the depth of data behind them) with our limited partners to help them better evaluate funds they’re considering. It will also be fascinating to watch how the ‘40 Act and other evergreen structures hold up if we enter a more challenging environment. Many have already seen substantial investor withdrawals — well beyond the 5% quarterly gates they had planned for — despite limited public visibility into asset performance and virtually no secondary market pricing signals. Market pricing has a way of revealing truth faster than internal valuations. Curious to hear how others are thinking about these dynamics — especially as liquidity and transparency become even more important. #PrivateEquity #BDCs #AlternativeInvestments #SecondaryMarkets #CapitalMarkets

We are honored to be recognized by SecondaryLink and the secondaries community as the Top Fund of Funds Buyer for the third consecutive year.   Our sincere gratitude to our dedicated team and to this year’s SecLink Awards voters for their continued support! Read the full list of winners here: https://lnkd.in/gtmr4Grk 

SecLink Awards: 2025 Winners Recap. Over 3000 professionals cast their vote to reveal the top secondary buyers, advisors, lenders, law firms, insurance providers, and new entrants of 2025! https://lnkd.in/d3PZxYsT

When racing, it has always struck me that a head start often leads to a more certain — and easier — victory than simply being the fastest. This kind of advantage can help even a tortoise beat a hare. Limited Partners (LPs) investing in private equity often face early headwinds in their portfolio returns when launching new programs. When LPs commit capital to newly launched primary funds, those funds incur organizational expenses and management fees long before capital is fully deployed and value is created. The result is negative early returns — the well-known J-curve. Kline Hill Partners can help educate LPs on the j-curve and how to best think about (and measure) improving it!! Just like giving the tortoise a head start, many LPs turn to secondary funds when launching new programs or scaling their alternatives allocation. (Secondary funds have also historically delivered strong net IRRs that frequently outperform traditional buyout, venture, and fund-of-funds vehicles.) Secondary funds provide this early boost largely because they purchase mature interests at a discount to NAV. These positions are then immediately marked up to fair value, generating an instant gain that can offset the early fee drag and losses elsewhere in the portfolio. The outcome is a more diversified program that gets off to a much healthier start while underlying managers focus on growing their portfolio companies. However, not all secondary funds deliver the same level of J-curve mitigation. Here are some of the key factors that matter most: 🔵 Faster deployment pace — closing deals and investing capital quickly 🔵 Larger discounts to NAV — some managers (e.g., Kline Hill Partners) have acquired interests at discounts of up to 40%, well above the typical market average of ~15%. Leverage and capital recycling can compound this advantage further. 🔵 Strong cash multiples and early distributions — the size and timing of returns beyond just the initial discount make a big difference. 🔵 Timing of commitment — entering a secondary fund later in its fundraising cycle (well after first close) can accelerate the J-curve benefit, although many top-tier funds have shorter, more competitive raise windows. Finally, how do you measure the J-curve benefit? One clear way is to calculate the dollars of J-curve improvement (or capital efficiency gain) generated per $10 million commitment into a secondary fund at the 6-, 12-, and 24-month points. I may share more details on modeling this in a future post.

Had the pleasure to meet up with Paul S. Atkins, Chairman of the Securities and Exchange Commission. There was initially a fireside chat hosted by the American Council on Germany and my good friends Marcel A. Bens and Erica Bens. Paul covered many relevant topics to #privateequity and secondaries: 🔵 Pending rules in the next month that could impact retailization 🔵 Congressional status on crypto regulation and allowing them to pay interest on holdings (in my opinion banks have had too much influence and this is going the wrong way and may have helped drive Coinbase down 20% recently) 🔵 General views on regulatory environment for private assets At an intimate reception after, Paul made the mistake of mentioning people trying to get selfies with him at a prior event. Of course I jumped on that thought and got one for myself. I'm very appreciative of his work and that of the SEC to modernize the regulatory environment in a pro-business way that still works to protect (and increase protections) in the market.

Reflecting on 11 years since founding Kline Hill Partners, I'm filled with gratitude for the journey. What started as a focused effort to provide liquidity in the often-overlooked small-deal secondary market has grown into something truly special—thanks to an exceptional team and trusted partners. As we look to the next chapter, we're more excited than ever to continue delivering liquidity solutions, building deeper relationships, continuing to expand the markets where we invest, and driving strong risk-adjusted returns for our LPs. Here's to many more years of partnership and success! I'd love to hear from our LPs, GPs, and partners—what's been a highlight for you in the secondary market this year? Some Kline Hill achievements: 🔵 860+ transactions closed — delivering liquidity where it's needed most 🔵 Relationships with over 1,000 GPs we've transferred into 🔵 A thriving primary program now partnering with 65 managers 🔵 3,500+ funds transferred across diverse portfolios 🔵 An outstanding team of 70+ professionals — I feel truly fortunate to work alongside them every day 🔵 A supportive group of limited partners who've fueled our growth and to whom we're deeply committed, proud of the returns we're generating together Proud of what this talented team has built together over 11 years, and excited to keep delivering for our LPs and GPs in the years ahead.