E28: Private Equity Secondaries with Robert McGrath

The private equity asset class is often absent from the portfolios of the everyday investor. For those that do invest in private equity, they experience large capital requirements, long holding periods, and often higher risk - albeit in the pursuit of higher returns. Private equity secondaries may mitigate some of the challenges noted above.

In this episode of The Unlimited Podcast, Brian speaks with Robert McGrath, Founder and Managing Director of Overbay Capital Partners, who will explain what private equity is, introduce private equity secondaries, and share the backstory of how he and his brother became early leaders in this space.

Overbay Capital Partners, is a private equity secondaries firm managing almost $2 billion in assets on behalf of institutions and private investors.

Robert leads Overbay's investment team and is responsible for the overall management of the firm. Rob began working in secondaries almost 20 years ago when the secondary market was still in its infancy and a tiny fraction of its size today. He has had a front row seat on the secondary market as it grew from obscurity to the prominent investment strategy it is today.

Prior to forming Overbay, Rob worked for 12 years as an intermediary in the secondary market at Setter Capital where he advised institutions on buying and selling private equity funds. Over that period, Rob was one of the most prolific secondary deal makers in the world, completing over 700 transactions, representing more than $20 billion in value. Robert holds a Bachelor of Arts degree from Queen's University and a Master of Science degree in Accounting & Finance from the London School of Economics.

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Timestamps:

0:00 Intro & Disclaimer

4:13 What is private equity?

10:37 Where does private equity fit in a portfolio?

14:13 Barriers to accessing private equity

17:18 Private equity experience and the "J" curve

25:21 Robert's history with private equity

28:16 Why would an institution want to sell private equity?

31:08 Why buy private equity secondaries?

34:57 Founding Overbay

41:32 How do private equity secondaries differ from regular private equity?

45:33 How does Overbay pick the secondaries to buy?

48:57 Returns on private equity secondaries

53:42 If Robert could do anything, what would it be?

55:41 Outro