Pinegrove Opportunity Raises $2.2 Billion for New Venture Secondaries Fund
(Bloomberg) — Pinegrove Opportunity Partners closed a major investment round in a fast-growing niche of the venture capital market, raising $2.2 billion for its first fund.
The San Francisco-based firm is what’s known as a secondary venture. Instead of leading pre-rounds that could fund a company’s future growth, it buys existing ownership stakes in other venture-backed companies or funds. The venture secondary market is growing and gaining traction as startup founders increasingly choose not to sell their businesses or take them public as the traditional venture capital model struggles to find liquidity.
“There is a long-term structural change occurring in companies that remain private longer,” said Brian Laibow, Managing Partner and Chief Investment Officer. “This illiquidity problem has spread to everyone in the industry [from] from corporations to GPs and LPs.”
The company said Pinegrove Opportunity Partners, founded in 2023, received significant support from Brookfield Asset Management and Sequoia Heritage, which invested $500 million in the first fund. Other limited partners include the Florida State Board of Regents, according to a person with knowledge of the matter who asked not to be named because of private information.
The 16-person team at Pinegrove is led by Laibow, a former managing director of Oaktree Capital Management’s Global Opportunities Fund; General partner Prateek Bhide, formerly of D1 Capital Partners; and Gaurav Mathur, a general partner who is the former head of U.S. equity private markets at Goldman Sachs Group Inc.
Pinegrove plans to distribute the majority of its capital directly to mid- and late-stage private technology companies approaching profitability, providing flexible liquidity and financing options to founders, venture teams and their investors. The remaining capital will be transferred to funds or other investment instruments. The firm’s average check size will be between $50 million and $250 million.
Pinegrove, payments provider Stripe, software firm Databricks Inc. and has already invested $1 billion in its first fund, including secondary investments in fintech Revolut Ltd.
Pinegrove provides access to companies through a variety of means, including purchasing a secondary interest from an existing investor in a startup or purchasing a limited partner’s interest in a fund with exposure to a coveted company. The firm is also investing in tender offers, transactions that allow startup staff to sell shares to investors, which are growing in popularity.
The venture secondary market is also on the rise, with a similar movement in private markets generally. BlackRock Inc. is preparing its own fund, and Goldman Sachs Group Inc. just completed its acquisition of Industry Ventures, which has a secondary venture arm.
While some venture firms are amassing increasingly larger war chests, such as Andreessen Horowitz’s recent $15 billion funding, Pinegrove’s new fund focuses on secondary stakes that may come at a discount or come with access to mature, high-demand startups.
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