Digital currency exchangers (DCEs)

Digital currency exchangers (DCEs, independent exchange providers or e-currency exchangers) are market makers which exchange fiat currency for electronic money, such as digital gold currency (DGC), and/or convert one type of digital currency (DC) into another, such as WebMoney into e-gold. Exchangers apply either a commission or bid/offer spread to transactions.

Some digital gold currency accounts, such as e-gold, do not provide an in-house service to purchase their private currency so it is necessary to use a third-party digital currency exchanger. According to e-gold's website the reason they do not provide an in-house exchange service is so there can be no debt or contingent liabilities associated with the business, making e-gold Ltd. absolutely free of any financial risk. They claim e-gold Ltd. does not possess currency of any nation or even have a bank account.

Risks

There are no specific financial regulations governing DCEs, so they operate under self-regulation. However the Global Digital Currency Association (GDCA), founded in 2002, are a non-profit association of online currency operators, exchangers, merchants and users. On their website they claim their goal is to "further the interests of the industry as a whole and help with fighting fraud and other illegal activities, arbitrate disputes and act as escrow agent when and where required."

It is possible for clients to purchase DGC by credit card, and therefore receive consumer protection from their credit card company. Various exchangers offer this service, although the exchange fees are typically higher than using a wire transfer .

Exchangers

Comparison of Digital Currency Exchangers (DCEs) as of 1 October 2006:

Digital Currency Exchanger	Year founded	GDCA member	Telephone	Telefax	email	Digital currencies accepted	Fiat currencies accepted	Fee buying DC	Fee selling DC	Fee exchanging DC to DC
CurrEx	2007	No	Yes			3	0	N/A	N/A	0–5%
SaveChange.ru	2007	Yes	Yes			5	0	3%–5%	5%	0–5%
Euro Gold Sales	2004	Yes	Yes			2	3	2.5%–4%%	1.9%	N/A
ExchEngine	2004	No	Yes			5	?	?	?	?
GoldExchange.eu	2005	Yes	Yes			3	2	1.9–2.9%	1.9%	N/A
GoldNow	1999	Yes	Yes			4	9	5%	5%	5%
Goldtotem	2005	No	Yes			4	3	3–5%	0.75–1.5%	1.5–3%
IntlExchange.com	2005	Yes	Yes			9	10	2%	1%	1.5%
London Gold Exchange	2000	Yes	No			8	?	3–4%	1–4%	3–4%
NetPay	2001	No	No			?	?	?	?	?
ROBOXchange	2002	Yes	Y			14	0	N/A	N/A	1–5%
SpeedyExchange	2003	Yes	No (answerphone)			7	3	8–13%	1.5–9%	0.3–4.4%
Webmoney.co.nz	2004	Yes	No			3	1	5–7%	3%	0–5%
Wm-center.com	2005	Yes	Yes			11	3	1.5–6%	1–8%	0–10%
Goldxcash.us	2007	No	Yes			11	3	2–8%	2–8%	2–6%

Regulatory issues

In September 2004 several Australian based e-gold currency exchangers voluntarily ceased operation as they did not hold an Australian Financial Services licence (AFSL) . Australian based DCEs that elected to close, due to the Australian Securities and Investments Commission (ASIC) licencing requirements, included:

• goldex.net
• sydneygoldsales.com
• ozzigold.com

In July 2006 Gold Age was closed down by US government authorities following the arrest of the owners, Arthur Budovsky and Vladimir Kats, on account of not having a New York state "money transmitters" licence.

In April 2007, the US government ordered e-gold administration to lock/block approximately 58 e-gold accounts, owned and used by The Bullion Exchange, AnyGoldNow, IceGold, GitGold, The Denver Gold Exchange, GoldPouch Express, 1MDC (a Digital Gold Currency, based on e-gold), and others, and forced G&SR (owner of OmniPay) to liquidate the seized assets . In addition, a few weeks later, e-gold themselves were indicted with 4 indictments. However, e-gold are still in business, and are growing at the rate of approximately 95,000 new accounts per month . Here is the DoJ release and here is the rebuttal by Douglas Jackson, CEO .

Drop Shipping

Drop shipping is a supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to wholesalers, who then ship the goods directly to the customer. The retailers make their profit on the difference between the wholesale and retail price.

Procedure

Some drop shipping retailers may keep "show" items on display in stores, so that customers can inspect an item similar to those that they can purchase. Other retailers may provide only a catalogue or website.

Retailers that drop ship merchandise from wholesalers may take measures to hide this fact to avoid any stigma, or to keep the wholesale source from becoming widely known. This can be affected by "blind shipping" (shipping merchandise without a return address), or "private label shipping" (having merchandise shipped from the wholesaler with a return address customized to the retailer). A customized packing slip may also be included by the wholesaler, indicating the retailer's company name, logo, and/or contact information.

Small business

Drop shipping can occur when a small retailer who typically sells in small quantities to the general public receives a single large order for a product. Rather than route the shipment through the retail store, the retailer may arrange for the goods to be shipped directly to the customer.

Online auctions

Many sellers on online auction sites, such as eBay, also drop ship. Often, a seller will list an item as new and ship the item directly from the wholesaler to the highest bidder. The seller profits from the difference between the winning bid and the wholesale price, minus any selling and merchant fees from the auction site. A seller is permitted to list items that are currently not in his/her own possession, provided that he/she follows eBay's policy on pre-sale items.

Custom products

A new emerging trend in the drop ship business is private label drop shipping, in which a manufacturer produces a custom item for a retailer and drop ships it. The range of private label drop shipped items varies from simple keychains and t-shirts with custom logos or pictures to customized formulations for vitamins and nutritional supplements.

Benefits

The two main benefits of drop shipping are - no upfront inventory to purchase and a positive cash flow cycle. A positive cash flow cycle occurs because the seller is paid when the purchase is made. The seller usually pays the wholesaler using a credit card or credit terms. Therefore, there is a period of time in which the seller has the customer's money, but has not yet paid the wholesaler.

Risks

As in any business, some risks are involved in drop shipping. For example, back ordering may occur when a seller places a shipment request with a wholesaler, but the product is sold out. Back ordering may be accompanied by a long wait for a shipment while the wholesaler waits for new products, which may reflect badly on the retailer. A good wholesaler will keep retailers updated, but it is the business owner's job to be aware of the quantities that the wholesaler has available.

Scams

Drop shipping has also featured prominently in some Internet-based home business scams. ^[1] Scam artists will promote drop shipping as a lucrative "work from home opportunity". The victim who buys into this scam will be sold a list of businesses from which drop-shipment orders can be placed. These businesses may not be wholesalers, but other businesses or individuals acting as middlemen between retailers and wholesalers, with no product of their own to sell. These middlemen often charge prices that leave little profit margin for the victim, and require a regular fee for the retailer's usage of their services.

Laser Ability !

Laser is used on ability. What is laser?

Laser is an electronic-optical device that produces coherent light radiation. The term "laser" is an acronym for "Light Amplification by Stimulated Emission of Radiation". A typical laser emits light in a narrow, low-divergence monochromatic (single-coloured, if the laser is operating in the visible spectrum), beam with a well-defined wavelength. In this way, laser light is in contrast to a light source such as the incandescent light bulb, which emits light over a wide area and over a wide spectrum of wavelengths.
The first working laser was demonstrated in May 1960 by Theodore Maiman at Hughes Research Laboratories. Recently, lasers have become a multi-billion dollar industry. The most widespread use of lasers is in optical storage devices such as compact disc and DVD players, in which the laser (a few millimeters in size) scans the surface of the disc. Other common applications of lasers are bar code readers and laser pointers.

In industry, lasers are used for cutting steel and other metals and for inscribing patterns (such as the letters on computer keyboards). Lasers are also commonly used in various fields in science, especially spectroscopy, typically because of their well-defined wavelength or short pulse duration in the case of pulsed lasers. Lasers are used by the military for target identification and illumination for weapons delivery. Lasers used in medicine are used for internal surgery and cosmetic applications.

Although the word light in the acronym Light Amplification by Stimulated Emission of Radiation is typically used in the expansive sense, as photons of any electromagnetic energy; it is not limited to photons in the visible spectrum. Hence there are infrared lasers, ultraviolet lasers, X-ray lasers, etc. For example, a source of atoms in a coherent state can be called an atom laser.

A laser consists of a gain medium inside a highly reflective optical cavity, as well as a means to supply energy to the gain medium. The gain medium is a material (gas, liquid, solid or free electrons) with appropriate optical properties. In its simplest form, a cavity consists of two mirrors arranged such that light bounces back and forth, each time passing through the gain medium. Typically, one of the two mirrors, the output coupler, is partially transparent. The output laser beam is emitted through this mirror.

Light of a specific wavelength that passes through the gain medium is amplified (increases in power); the surrounding mirrors ensure that most of the light makes many passes through the gain medium, stimulating the gain material continuously. Part of the light that is between the mirrors (that is, within the cavity) passes through the partially transparent mirror and escapes as a beam of light.

The process of supplying the energy required for the amplification is called pumping. The energy is typically supplied as an electrical current or as light at a different wavelength. A typical pump source is a flash lamp or perhaps another laser. Most practical lasers contain additional elements that affect properties such as the wavelength of the emitted light and the shape of the beam.

Student loans in the United Kingdom

British undergraduate and PGCE students can apply for a loan through their local education authority (LEA) in England and Wales, the Student Awards Agency for Scotland (SAAS), or their local education and library board in Northern Ireland. The LEA, SAAS, or education and library board then assesses the application and determines the amount that the student is eligible to borrow, as well as how much tuition fees, if any, the students' parents must pay. The family's income; whether the student will be living at home, away from home, or in London; disabilities; and other factors are taken into account. 75% of the full loan (around £3,000) is available to all students in England and Wales, with only the final 25% being means-tested (taking the total available up to just over £4,600 for those studying outside London and £6,475 for those living away from the family home and studying in London). Scotland has a slightly different assessment method where more of the loan is means-tested with a minimum loan of only £840. However much you get, it is paid in three instalments during each year of the student's course (one per term). Special rules apply for some courses and for part-time courses.

Loans are provided by the Student Loans Company and do not have to be repaid until the April of the year after students have completed their course and are earning £15,000 a year. The interest rate is updated annually and is tied to inflation (currently 4.8%). It is applied only to maintain a constant value of the outstanding loan, as the 'buying power' of the pound changes and not to provide 'earned interest'. The loan is normally repaid using the PAYE system, with 9% of the graduate's gross salary over £15,000 automatically being deducted to pay back the loan. There is no particular schedule for clearing the debt, but, if it has not been cleared 25 years after repayment began, or the student turns 65 years old, the remaining debt will be cancelled, in circumstances where the borrower has fully met their repayment obligations and not defaulted at any time when they should have been repaying. For students beginning courses before 1998, the arrangements for repaying and deferring are different. Although Scottish students have their tuition fees covered by the SAAS during their time of study, much of this is actually repaid in a Graduate Endowment. The Graduate Endowment has now been abolished and new students will not be required to pay it.

The Higher Education Act 2004 made significant changes to the loans system in England, Wales and Northern Ireland from 2006. Those with sufficient private funding can still pay tuition fees 'upfront' but everyone - regardless of their income - is now entitled to take out a loan to pay their fees. For those who take out a tuition fee loan, the Student Loans Company pays their fees direct to the place of study and the student, once they have graduated or left their course, Universities are now required to sign a special agreement with the Office for fair Access and, in return for an undertaking to provide a minimum bursary of £300 for all students who qualify, they may now charge tuition fees of up to £3,070. Students who began their courses prior to academic year 2006/07 are entitled to borrow additional loans to cover their tuition fees (which remain at the old rate).Critics claim these top-up fees will create tiers of "expensive" and "cheap" universities and make university financially inaccessible to many students. As a result, there have been national demonstrations and protests by students' unions.

For all students whose 'domicile' (family or full-time home base) is in England, radical changes are underway to enhance and improve the student finance system. Now known as Student Finance England, this is a comprehensive new service which is being phased in between now (2008) and 2012 and is being based on widespread consultation with students, prospective students, parents and other 'sponsors' helping a student through university. It seeks to reduce significantly the amount of time and effort required to apply for finance and the system is being constructed in a way which joins up the main agencies in higher education in a way that has not existed hitherto. The time scale of application is being changed, so that a student will be able to apply for finance at the same time as they apply for a university place and information is being shared in such a way that repeated requests for the same student details will be got rid of. First year students applying this year for a place in 2009 will have to deal with just two agencies - UCAS (to apply for a place) and the Student Loans Company, which will share much of the information supplied to UCAS and will then assess the applicant's eligibility for finance and make the appropriate payments. This service will be increased and extended to second and third year students in the subsequent two years until all applicants are assessed in the same way by SLC. Already, student finance has been radically changed to make it much easier for people from less well-off backgrounds to attend university. Now, anyone from a home background earning less than £25,000 but not more than £60,000 after normal deductions is entitled to a maintenance grant, the size of which(up to £2,835) will depend on income. Also, those entitled to the full maintenance grant are automatically entitled to the full bursary at their place of study (which can be up to £3,000 but is typically £1,000 per academic year). This year, the maximum loan amount for studying in London is £6,475 and (away from the family home) elsewhere £4,625.

Debt ratings, risk and cancellation

Risk free interest rate

Main article: risk-free interest rate

Lendings to stable financial entities such as large companies or governments are often termed "risk free" or "low risk" and made at a so-called "risk-free interest rate". This is because the debt and interest are highly unlikely to be defaulted. A good example of such risk-free interest is a US Treasury security - it yields the minimum return available in economics, but investors have the comfort of the (almost) certain expectation that the US Treasury will not default on its debt instruments. A risk-free rate is also commonly used in setting floating interest rates, which are usually calculated as the risk-free interest rate plus a bonus to the creditor based on the creditworthiness of the debtor (in other words, the risk of him defaulting and the creditor losing the debt). In reality, no lending is truly risk free, but borrowers at the "risk free" rate are considered the least likely to default.

However, if the real value of a currency changes during the term of the debt, the purchasing power of the money repaid may vary considerably from that which was expected at the commencement of the loan. So from a practical investment point of view, there is still considerable risk attached to "risk free" or "low risk" lendings. The real value of the money may have changed due to inflation, or, in the case of a foreign investment, due to exchange rate fluctuations.

The Bank for International Settlements is an organisation of central banks that sets rules to define how much capital banks have to hold against the loans they give out.

Ratings and creditworthiness

Specific bond debts owed by both governments and private corporations is rated by rating agencies, such as Moody's, Fitch Ratings Inc., A. M. Best and Standard & Poor's. The government or company itself will also be given its own separate rating. These agencies assess the ability of the debtor to honor his obligations and accordingly give him a credit rating. Moody's uses the letters Aaa Aa A Baa Ba B Caa Ca C, where ratings Aa-Caa are qualified by numbers 1-3. Munich Re, for example, currently is rated Aa3 (as of 2004). S&P and other rating agencies have slightly different systems using capital letters and +/- qualifiers.

A change in ratings can strongly affect a company, since its cost of refinancing depends on its creditworthiness. Bonds below Baa/BBB (Moody's/S&P) are considered junk- or high risk bonds. Their high risk of default (approximately 1.6% for Ba) is compensated by higher interest payments. Bad Debt is a loan that can not (partially or fully) be repaid by the debtor. The debtor is said to default on his debt. These types of debt are frequently repackaged and sold below face value. Buying junk bonds is seen as a risky but potentially profitable form of investment.

Cancellation

Short of bankruptcy, it is rare that debts are wholly or partially forgiven. Traditions in some cultures demand that this be done on a regular (often annual) basis, in order to prevent systemic inequities between groups in society, or anyone becoming a specialist in holding debt and coercing repayment. Under English law, when the creditor is deceived into forgoing payment, this is a crime: see Theft Act 1978.

International Third World debt has reached the scale that many economists are convinced that debt cancellation is the only way to restore global equity in relations with the developing nations.

What do you know about Lisa del Giocondo?

Early life and family

Another view of Lisa in a cartoon for Mona Lisa attributed to Leonardo

At the time of the Quattrocento, Florence was among the largest cities in Europe, considered rich and a successful economy. Life was "not idyllic" for all residents though, among whom there were great disparities in wealth. Lisa's family was old and aristocratic but over time had lost its influence. They were comfortable but not wealthy, and lived on farm income.

Antonmaria di Noldo Gherardini, Lisa's father, lost two wives, Lisa di Giovanni Filippo de Carducci, whom he married in 1465, and Caterina Rucellai, whom he married in 1473. Both died in childbirth. Lisa's mother was Lucrezia del Caccia, daughter of Piera Spinelli and Gherardini's wife by his third marriage in 1476. Gherardini at one time owned or rented six farms in Chianti that produced wheat, wine and olive oil and where livestock was raised.

Lisa was born in Florence on June 15, 1479 on Via Maggio, although for many years it was thought she was born on one of the family's rural properties, Villa Vignamaggio just outside Greve. She is named for Lisa, a wife of her paternal grandfather. The eldest of seven children, Lisa had three sisters, one of which was named Ginevra, and three brothers, Giovangualberto, Francesco, and Noldo.

The family lived in Florence, originally near Santa Trinita and later in rented space near Santo Spirito, most likely because they were not able to afford repairs to their former house when it was damaged. Lisa's family moved to what today is called Via dei Pepi and then near Santa Croce, where they lived near Ser Piero da Vinci, Leonardo's father. They also owned a small country home in St. Donato in the village of Poggio about 32 kilometres (20 mi) south of the city. Noldo, Gherardini's father and Lisa's grandfather, had bequeathed a farm in Chianti to the Santa Maria Nuova hospital. Gherardini secured a lease for another of the hospital's farms, and so that he could oversee the wheat harvest, the family spent summers there at the house named Ca' di Pesa.

Marriage and later life

On March 5, 1495, Lisa married Francesco di Bartolomeo di Zanobi del Giocondo, a modestly successful cloth and silk merchant, becoming his second wife at age 15. Lisa's dowry was 170 florins and the San Silvestro farm near her family's country home, a sign that the Gherardini family was not wealthy at the time and reason to think she and her husband loved each other. The property lies between Castellina and San Donato in Poggio, near two farms later owned by Michelangelo. Neither poor nor among the most well-to-do in Florence, the couple lived a middle-class life. Lisa's marriage may have increased her social status because her husband's family may have been richer than her own. Francesco is thought to have benefited because Gherardini is an "old name". They lived in shared accommodation until March 5, 1503, when Francesco was able to buy a house next door to his family's old home in the Via della Stufa. Leonardo is thought to have begun painting Lisa's portrait the same year.

Central Florence. Francesco and Lisa lived on Via della Stufa (red), about 1 kilometre (0.6 mi) north of the Arno River. Lisa's parents lived closer to the river, at first north and later south (purple).

Lisa and Francesco had five children: Piero, Camilla, Andrea, Giocondo, and Marietta, four of them between 1496 and 1507. Lisa also raised Bartolomeo, the son of Francesco and his first wife, Camilla di Mariotto Rucellai, who was about age 1 when his mother died. Lisa's stepmother, Caterina di Mariotto Rucellai, and Francesco's first wife were sisters, members of the prominent Rucellai family.

Camilla and Marietta became Catholic nuns. Camilla took the name Suor Beatrice and entered the convent of San Domenico di Cafaggio, where she was entrusted to the care of Antonmaria's sister, Suor Albiera and Lisa's sisters, Suor Camilla (who was not chaste and was acquitted in a scandalous visitation by four men at the convent) and Suor Alessandra. Beatrice died at age 18 and was buried in the Basilica di Santa Maria Novella. Lisa developed a relationship with Sant'Orsola, a convent held in high regard in Florence, where she was able to place Marietta in 1521. Marietta took the name Suor Ludovica and became a respected member of the convent in a position of some responsibility.

Francesco became an official in Florence. He was elected to the Dodici Buonomini in 1499 and to the Signoria in 1512, where he was confirmed as a Priori in 1524. He may have had ties to Medici family political or business interests. In 1512 when the government of Florence feared the return of the Medici from exile, Francesco was imprisoned and fined 1,000 florins. He was released in September when the Medici returned.

In one account, Francesco died in the plague of 1528. Lisa fell ill and was taken by her daughter Ludovica to the convent of Sant'Orsola, where she died about four years later at the age of 63. In a scholarly account of their lives, Francesco lived to be 80 years old. He died in 1539, and Lisa may have lived until at least 1551, when she would have been 71 or 72.

In June 1537 in his will among many provisions, Francesco returned Lisa's dowry to her, gave her her personal clothing and jewelry and provided for her future. Upon entrusting her care to their daughter Ludovica and, should she be incapable, his son Bartolomeo, Francesco wrote, "Given the affection and love of the testator towards Mona Lisa, his beloved wife; in consideration of the fact that Lisa has always acted with a noble spirit and as a faithful wife; wishing that she shall have all she needs...."

Find Out Debt consolidation

Are you going to borrow money for business or other way. Let's find out fee or rate loan
Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.

Debt consolidation can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an asset that serves as collateral, most commonly a house. In this case, a mortgage is secured against the house. The collateralization of the loan allows a lower interest rate than without it, because by collateralizing, the asset owner agrees to allow the forced sale (foreclosure) of the asset to pay back the loan. The risk to the lender is reduced so the interest rate offered is lower.

Sometimes, debt consolidation companies can discount the amount of the loan. When the debtor is in danger of bankruptcy, the debt consolidator will buy the loan at a discount. A prudent debtor can shop around for consolidators who will pass along some of the savings. Consolidation can affect the ability of the debtor to discharge debts in bankruptcy, so the decision to consolidate must be weighed carefully.

Debt consolidation is often advisable in theory when someone is paying credit card debt. Credit cards can carry a much larger interest rate than even an unsecured loan from a bank. Debtors with property such as a home or car may get a lower rate through a secured loan using their property as collateral. Then the total interest and the total cash flow paid towards the debt is lower allowing the debt to be paid off sooner, incurring less interest.

Because of the theoretical advantage that debt consolidation offers a consumer that has high interest debt balances, companies can take advantage of that benefit of refinancing to charge very high fees in the debt consolidation loan. Sometimes these fees are near the state maximum for mortgage fees. In addition, some unscrupulous companies will knowingly wait until a client has backed themselves into a corner and must refinance in order to consolidate and pay off bills that they are behind on the payments. If the client does not refinance they may lose their house, so they are willing to pay any allowable fee to complete the debt consolidation. In some cases the situation is that the client does not have enough time to shop for another lender with lower fees and may not even be fully aware of them. This practice is known as predatory lending. Certainly many, if not most, debt consolidation transactions do not involve predatory lending.

Student loan consolidation

In the United States, federal student loans are consolidated somewhat differently, as federal student loans are guaranteed by the U.S. government. In a federal student loan consolidation, existing loans are purchased and closed by a loan consolidation company or by the Department of Education (depending on what type of federal student loan the borrower holds). Interest rates for the consolidation are based on that year's student loan rate, which is in turn based on the 91-day Treasury bill rate at the last auction in May of each calendar year.^{[citation needed]}

Student loan rates can fluctuate from the current low of 4.70% to a maximum of 8.25% for federal Stafford loans, 9% for PLUS loans.^{[citation needed]} The current consolidation program allows students to consolidate once with a private lender, and reconsolidate again only with the Department of Education.^{[citation needed]} Upon consolidation, a fixed interest rate is set based on the then-current interest rate. Reconsolidating does not change that rate. If the student combines loans of different types and rates into one new consolidation loan, a weighted average calculation will establish the appropriate rate based on the then-current interest rates of the different loans being consolidated together.

Federal student loan consolidation is often referred to as refinancing, which is incorrect because the loan rates are not changed, merely locked in. Unlike private sector debt consolidation, student loan consolidation does not incur any fees for the borrower; private companies make money on student loan consolidation by reaping subsidies from the federal government.

Student loan consolidation can be beneficial to students' credit rating, but it's important to note that not all federal student loan consolidation companies report their loans to all credit bureaus.^{[citation needed]}

Private Equity Secondary Market

In finance, the private equity secondary market (also often called private equity secondaries or secondaries) refers to the buying and selling of pre-existing investor commitments to private equity and other alternative investment funds. Sellers of private equity investments sell not only the investments in the fund but also their remaining unfunded commitments to the funds. By its nature, the private equity asset class is illiquid, intended to be a long-term investment for buy-and-hold investors. For the vast majority of private equity investments, there is no listed public market; however there is a robust and maturing secondary market available for sellers of private equity assets.Driven by strong demand for private equity exposure, a significant amount of capital has been committed to dedicated secondary market funds from investors looking to increase and diversify their private equity exposure.
Secondary market participantsLeading secondary investment firms (current dedicated secondary capital in excess of $2 billion) include: AlpInvest Partners, AXA Private Equity, Coller Capital, HarbourVest Partners, Lexington Partners and Pantheon Ventures.
Other major independent secondary firms (excluding banks, $1 - $2 billion of current dedicated capital) include Adams Street Partners, Landmark Partners, Newbury Partners, Partners Group, Paul Capital Partners and Pomona Capital.
Additionally major investment banking firms, including Credit Suisse, Deutsche Bank, Goldman Sachs, Lehman Brothers and Morgan Stanley have active secondary investment programs and other institutional investors typically have appetite for secondary interests.
Within the secondary arena, certain smaller specialized firms, including Saints Capital and W Capital, focus exclusively on purchasing portfolios of direct investments in operating companies (referred to as secondary directs. Other niches within the secondary market include purchases of interests in fund-of-funds and secondary funds (Montauk Triguard) and purchases of interests in real estate funds (Liquid Realty and Madison Harbor Capital).
While intermediation in the secondary market is still not as pervasive as in corporate mergers and acquisitions, leading advisors to secondary market sellers include investments banks (Credit Suisse and UBS), dedicated boutique firms (Cogent Partners and Fidequity), electronic exchanges (NYPPE), as well as established fund placement agents (Campbell Lutyens, Probitas Partners and Triago).
Types of Secondary TransactionsSecondary transactions can be generally split into two basic categories
Sale of Limited Partnership Interests - The most common secondary transaction, this category includes the sale of an investor's interest in a private equity fund or portfolio of interests in various funds through the transfer of the investor's limited partnership interest in the fund(s). Nearly all type of private equity funds (e.g., including buyout, growth equity, venture capital, mezzanine, distressed and real estate) can be sold in the secondary market. The transfer of the limited partnership interest typically will allow the investor to receive some liquidity for the funded investments as well as a release from any remaining unfunded obligations to the fund. In addition to traditional cash sales, sales of limited partnership interests are being consummated through a number of structured transactions:
Structured Joint Ventures – Includes a wide variety of negotiated transactions between the buyer and seller that typically is customized to the specific needs of the buyer and seller. Typically, the buyer and seller agree on an economic arrangement that is more complex than a simple transfer of 100% ownership of the limited partnership interest Securitization – An investor contributes its limited partnership interests into a new vehicle (a collateralized fund obligation vehicle) which in turn issues notes and generates partial liquidity for the seller. Typically, the investor will also sell a portion of the equity in the leveraged vehicle. Also referred to as a collateralized fund obligation vehicle. Stapled Transactions – Occurs when a private equity firm (the GP) is raising a new fund. A secondary buyer purchases an interest in an existing fund from a current investor and makes a new commitment to the new fund being raised by the GP. Sale of Direct Interests – Secondary Directs or Synthetic secondaries, this category refers to the sale of portfolios of direct investments in operating companies, rather than limited partnership interests in investment funds. These portfolios historically have originated from either corporate development programs or large financial institutions. Typically this category can be subdivided as follows:
Secondary Direct – The sale of a captive portfolio of direct investments to a secondary buyer that will either manage the investments themselves or arrange for a new manager for the investments. Synthetic Secondary / Spinout - Under a synthetic secondary transaction, secondary investors acquire an interest in a new limited partnership that is formed specifically to hold a portfolio of direct investments. Typically the manager of the new fund had historically managed the assets as a captive portfolio. The most notable example of this type of transaction is the spinout of MidOcean Partners from Deutsche Bank in 2003. Tail-End – This category typically refers to the sale of the remaining assets in a private equity fund that is approaching, or has exceeded, its anticipated life. A tail-end transaction allows the manager of the fund to achieve liquidity for the fund's investors.