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Investing in private credit: what you need to know

jelle.vanes@marktlinkcapital.com (Jelle van Es) — Fri, 03 Jul 2026 08:41:18 GMT

Discover our Private Income Fund

There are many ways to invest. At Marktlink Capital, you can invest in private equity, venture capital, and co-investment funds, among others. These funds typically have a long term, which means your capital is tied up for an extended period.

Are you looking for more flexibility within private markets? Then private credit could be an interesting option. With the Marktlink Capital Private Income Fund, you invest indirectly in loans to unlisted companies and benefit from interest income paid out on a quarterly basis. You receive these payments regularly, whereas with private equity, you often don’t receive your first distribution until after a few years. In this article, you’ll learn how private credit works, what risks are involved, and for which investors our Private Income Fund might be a good fit.

What is private credit?

Private credit is a form of financing in which non-bank investors, such as investment funds, provide loans to companies and, for example, real estate projects. A company can use such a loan to make an investment or finance an acquisition. The advantage of private credit lies in the fact that obtaining financing from a bank takes longer. Banks must meet increasingly stringent requirements when granting loans. Private credit funds can take a specialized approach and offer a tailored solution more quickly.

With the Marktlink Capital Private Income Fund, you invest in a fund-of-funds that invests in unlisted corporate loans and real estate projects. Through underlying funds, capital is provided to hundreds of medium-sized companies.

These companies pay interest and repay their loans according to pre-agreed terms. The interest income and principal repayments form the basis for the returns distributed to investors.

Key takeaways from this blog

The difference between a bank loan and a private credit loan
The risks of private credit
How investing in private credit works
The difference between private credit and private equity
The different types of private credit financing
Which investors are suited for private credit

What is the difference between a bank loan and a private credit loan?

Private credit loans are provided to businesses. Why don’t these companies just opt for a bank loan?

Banks are subject to strict regulation and have extensive evaluation procedures. Businesses often have to meet a large number of conditions before a loan is approved. Private lenders also conduct a thorough analysis, but they generally have more flexibility in their decision-making and terms.

This offers several advantages over traditional bank financing.

Faster decision-making

With private credit, a credit decision can often be made more quickly. For companies that need capital quickly to capitalize on opportunities, this can be a significant advantage.

More customized terms

While banks typically rely on standardized processes, private credit providers are better able to tailor financing terms to a company’s specific situation. This often results in a solution that is attractive to both the borrower and the lender.

Actively contributing to the financial strategy

Private lenders regularly contribute ideas regarding a company’s financial strategy. This involvement can contribute to a sound financing structure and the company’s sustainable growth.

A hypothetical example

But how does an investment in private credit work in practice? Let’s look at a hypothetical example.

Suppose a software company with €50 million in revenue has the opportunity to acquire a competitor. This acquisition would allow the company to increase its market share and accelerate revenue growth. However, to finance the acquisition, the company needs additional capital.

A traditional bank might deem this financing too risky and require additional collateral, such as a personal guarantee from the owner. A private lender, on the other hand, can offer more customized solutions and tailor the financing to the company’s specific situation and future cash flows.

On the other hand, the risk for the lender may be higher. To compensate for that risk, the interest rate is typically higher than with a traditional bank loan. This remains attractive to the company because it gains faster access to capital and can capitalize on growth opportunities.

What are the risks of private credit?

As with any investment, investing in private credit also involves risks. It is therefore important to fully understand these risks before investing.

Credit risk

The most significant risk in private credit is credit risk. If a company can no longer meet its interest or principal payment obligations, this can result in losses for investors.

Although fund managers conduct extensive analyses before granting a loan, companies can still run into financial difficulties.

Risk profile

As with other private-market investments, the underlying risk profile of private credit is high. Past performance is no guarantee of future results, and significant losses are possible. It is possible to lose the entire investment.

Market risk

Economic headwinds can affect the companies in which investments are made. Examples include rising interest rates, slowing economic growth, refinancing difficulties, or an increase in bankruptcies. Such developments can impact the performance of a private credit portfolio.

How to invest in Private Credit

If you want to invest in private credit, you’ll typically follow these steps.

You commit your capital to a fund

The first step is to commit an investment amount. With the Marktlink Capital Private Income Fund, you can invest starting at €100,000. When you invest, you deposit the capital immediately, and your money is put to work right away.

The fund provides loans

Using the capital raised, the underlying fund extends loans to companies or other types of borrowers. These companies pay interest over the term of the loan and repay the principal to the underlying fund in accordance with pre-determined terms.

You receive distributions

The interest income and principal repayments received by the underlying fund are reinvested in the fund and periodically distributed to investors. This creates a relatively predictable stream of income.

What types of loans are common in private credit?

Various types of business loans are provided within private credit. Each form of financing has its own risk-return profile.

Direct lending

Direct lending is the most common form of private credit. These loans are also referred to as senior debt.

In this arrangement, the fund provides a loan directly to a company. These loans are often secured by collateral, such as machinery, inventory, real estate, or intellectual property.

Because these loans are high up in the capital structure, they generally carry a lower risk than other forms of lending.

Preferred equity

In funds focused on preferred equity transactions, investors receive a pre-agreed preferential return and have priority over common shareholders in the event of distributions or a sale.On the other hand, they assume greater risk than traditional lenders, as creditors are repaid first. As a result, preferred equity generally offers a higher expected return than senior debt loans.

Mezzanine financing

Mezzanine financing falls between debt and equity. It is also known as junior debt. This form of financing ranks lower in the capital structure than senior debt, resulting in higher risk. This is typically offset by a higher interest rate.

In some cases, lenders also receive what is known as an “equity kicker,” which allows them to benefit from the company’s appreciation in value.

Unitranche financing

A unitranche combines features of senior debt and mezzanine financing into a single loan.

This structure simplifies the financing process and enables faster decision-making. As a result, unitranche financing is increasingly being used for corporate acquisitions and growth financing.

For which investors might private credit be suitable?

Private credit is not suitable for every investor. Whether this asset class aligns with your goals depends on your financial situation, risk tolerance, and investment horizon.

In general, private credit can be an attractive option when:

You want to benefit from a stable and regular cash flow.
You want to invest in an evergreen fund structure so you don’t have to look for a new fund every few years (as is the case with many other private credit solutions).
You’re looking for a semi-liquid solution.
You do not need liquidity during the fund’s lock-up period.
You can withstand the loss of your entire investment
You understand the credit and market risks associated with private credit.

Frequently Asked Questions about private credit

What is a fund of funds?

An investment fund that invests capital in other private equity, credit, or venture capital funds, thereby providing investors who do not have direct access to such funds with exposure to a portfolio of diverse funds.

What is the minimum investment amount?

For the Marktlink Capital Private Income Fund, the minimum investment amount is €100,000.

What are the risks of private credit?

The main risks associated with private income are credit risk, liquidity risk, interest rate risk, and market risk. It is possible to lose (part of) your investment.

What are the expected returns?

The target distribution is 6–8% per year, paid out quarterly

Promotional announcement

Family offices focus on better-organized wealth

jelle.vanes@marktlinkcapital.com (Jelle van Es) — Wed, 17 Jun 2026 07:36:26 GMT

Key Findings

Every year, UBS publishes the Global Family Office Report. The latest edition was recently released and you can request a copy here. For the report, UBS surveyed the key trends among more than 300 family offices worldwide. Bastiaan van Slobbe, co-founder and managing partner of Marktlink Capital, took a closer look at the results

“What strikes me is that no specific asset class or dominant trend stands out,” says Van Slobbe. Whereas attention in recent years has often focused on a particular theme, that is now lacking. “There is no clear preference for, say, AI, gold, private equity, or the U.S. dollar.”

A turbulent world is prompting a reevaluation

The world is currently in a period of uncertainty. In 2025, much of the turmoil revolved around the import tariffs the United States imposed worldwide. In 2026, attention will shift primarily to tensions in the Middle East. These developments also influence the way families view their wealth.

Van Slobbe: “About 60% of the more than 300 families who participated in the study expect to adjust their strategic asset allocation in 2026. I think that’s a lot.”

Issues facing families?

According to Van Slobbe, the survey highlights a number of clear questions:

How do we protect our wealth in a turbulent world?
Where can we find structural growth outside the public markets?
How do we prevent excessive concentration in regions, currencies, or themes?
How do we build a governance structure that will last for multiple generations?

"We recognize these questions at Marktlink Capital as well. The families we work with are navigating the same dynamics. Wealth is often built through years of entrepreneurship, sometimes spanning multiple generations. You have to manage that carefully. That’s why families give careful thought to preserving value and to how they allocate and diversify their wealth over the long term.”

Bastiaan van Slobbe (left)

Private markets remain attractive

Private markets play an important role in long-term wealth accumulation. This aligns well with the background of many entrepreneurs. They have gone through a growth trajectory themselves and recognize that same ambition in other entrepreneurs who are in a similar phase.

Access to this market is becoming increasingly important. At the same time, the number of providers is also growing. “The challenge lies in the selection,” says Van Slobbe. “Who do you partner with?”

Key questions to consider include:

Who are the fund managers?
Which vintages are represented?
How is the portfolio structured?
What are the terms and conditions of the fund?
And just as important: how are the risks structured?

Better-Organized Assets

If Van Slobbe had to draw one key conclusion from the UBS study, it would be this:

"The coming years aren’t about more alternatives, but about better organizing wealth."

Families are seeking access to strong managers with a clear strategy. They want professional decision-making, combined with sufficient diversification across markets, sectors, and time horizons. In addition, attention to the next generation remains essential.

This is precisely where Marktlink Capital plays an important role. Curious about what we can do for you? Please contact us.

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Sector Focus: IT

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Wed, 20 May 2026 18:50:54 GMT

The IT sector is closely intertwined with private equity. Investments in software and IT service providers play a prominent role in the strategy of many funds, and IT entrepreneurs are involved in an above-average number of transactions with investment firms. In this article, we take a closer look at the sector and explore why this is the case—and how IT entrepreneurs are now reinvesting in their own sector through the funds of Marktlink Capital.

Few sectors have such a strong connection to private equity as the IT sector. Anyone who regularly reads the annual reports of major consultancies like Bain and McKinsey knows that this sector is well represented in the investment category: in recent years, deals in this space accounted for around a quarter of total deal value and about a third of the number of deals. Looking at it from the other side, the difference is even more striking: a very large share of mergers and acquisitions in the IT sector involves private equity. All in all, we're talking about hundreds of billions in invested capital.

The “Playbook”

When it comes to IT, investments typically follow two main tracks. On one side, you have software developers; on the other, service providers.

Each path has its own business model and reasons for being attractive to private equity as an asset class.

For software developers—especially in “Software as a Service” (SaaS)—the focus lies in scaling an existing company using capital from an investment firm to execute a growth strategy. A term commonly used here is the “playbook”: a structured, step-by-step plan used to guide the company through its growth process.

Key elements of such a plan often include international expansion, building a sales team, optimizing pricing, and implementing a subscription model. The latter is particularly appealing to investors, as subscriptions generate recurring revenue.

Then there are the service providers—the companies that lay the cables, install modems, and set up the cloud systems that underpin both businesses and governments. Often, these are licensed partners of systems like Microsoft’s Azure or SAP. These businesses usually start locally, with a strong regional focus or expertise in a specific market. Organic growth—growth without acquisitions—is often difficult due to a lack of talent, capital, or local market knowledge. Private equity addresses these issues by using external capital to combine multiple players in the same market into a larger company. This integration process brings service providers together into larger groups with shared services such as finance and HR. This is known as a buy-and-build strategy, where several similar companies are merged into a broader group.

Of course, this is a simplified representation of the market, and every investment case is unique, but these two models have largely enabled the explosive growth of IT in private equity in recent years.

Invest in What You Know

If you attend a Marktlink Capital event and chat with a group of investors, it quickly becomes clear that many of them are (former) IT entrepreneurs. A significant portion of them have encountered private equity in their own businesses or through peers, sparking curiosity about investing in private equity themselves. Looking at Marktlink Capital’s portfolio, we indeed see strong investment activity in IT across multiple levels.

First, we invest in generalist funds that allocate capital across various sectors, including IT. Examples include Waterland and CVC. Second, we invest in specialist funds—those focused exclusively on IT companies—such as Main Capital and Hg Capital. We also work with secondaries funds like ICG, which trade in existing positions in companies and funds, including IT-focused and generalist portfolios. Additionally, we make direct investments in outstanding IT companies as part of our co-investment strategy. One example is Visma: this IT powerhouse is pursuing a robust growth trajectory under the wing of Hg.

By investing in Marktlink Capital’s fund-of-funds, entrepreneurial IT professionals are able to reinvest in companies in a sector they know well—founded by ambitious entrepreneurs and supported by the best investment firms in Europe and North America. This aligns perfectly with Marktlink Capital’s core value: “Invest in what you know.”

(The data in this article comes from Preqin )

What is a closing?

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Wed, 20 May 2026 18:46:13 GMT

What is a closing in an investment fund?

A closing is always a celebratory moment in the lifecycle of an investment fund. It marks the completion of the fundraising process, after which the fund can officially start investing.

At least, that’s the theory. In practice, multiple closings often take place during the fundraising process. For example, we distinguish between a first closing, several interim closings, and a final closing. These moments are not only important milestones and so-called champagne moments but also serve as clear administrative deadlines by which all signed contracts must be submitted.

The different types of closings

First Closing
The first closing marks the initial round of commitments by investors. This allows the fund to start its investment activities. In this round, existing relationships of the fund participate, as well as investors who were on the waiting list for previous funds.
Interim Closings
During interim closings, additional capital is raised from new investors. To keep the process administratively manageable, several interim moments are scheduled. This helps spread the workload of the fundraising process.
Final Closing
The final closing marks the end of the fundraising period. At this point, the fund's total available capital is definitively established.

What should private investors pay attention to?

As a private investor, there are a few important things to keep in mind:

Register on time
Make sure to submit your registration and documentation on time. If you miss the closing, unfortunately, you cannot participate in the fund. Your contact person at Marktlink Capital will keep you informed about the process and the dates of the (interim) closings.
Benefit of an early closing
It may be financially advantageous to join at the first closing. Often, later entrants are required to pay an equalization fee. This makes sense: early investors make their capital available for a longer period and receive compensation for this.
Don’t wait too long for the final closing
Waiting until the final closing is not without risk. Once the fund reaches its maximum size, participation can no longer be guaranteed.

Type the title of your blog post here....

Team Marktlink Capital — Mon, 11 May 2026 13:02:01 GMT

Investing in private equity offers entrepreneurs the opportunity to participate in unlisted companies and thus benefit from long-term value creation. In doing so, they often enlist the help of specialized parties, such as Marktlink Capital. In this blog you can read why.

Type the title of your blog post here....

Team Marktlink Capital — Mon, 11 May 2026 11:53:40 GMT

Introduction

Private equity has emerged as an increasingly visible part of the investment landscape in recent years. But does this form of investing suit you? After all, each form of investment has its own ratio of risk and return, and in terms of time frame and related liquidity, different forms of investment also vary widely. In this blog, we look at the profile of private equity investing and you'll discover if it's a good fit for you, too.

Investing in Companies: Opportunities, Potential, and Risks

Team Marktlink Capital — Wed, 25 Mar 2026 09:58:12 GMT

What does investing in companies mean?

It may well be the cornerstone of our capitalist economy: investing in companies. You allocate your capital to a business in exchange for a share of ownership, with the aim of generating a return. But how can you, as a private investor, invest in companies, and how does Marktlink Capital support you in this process? In this blog, we explain.

What our AIFMD licence means for you as an investor

Team Marktlink Capital — Fri, 06 Feb 2026 10:00:48 GMT

On 4 February 2026, Marktlink Capital obtained an AIFMD licence. What does this licence entail, and what does (and does not) change for you as an investor?

An important milestone for Marktlink Capital

Marktlink Capital has recently obtained an AIFMD licence from the Dutch Authority for the Financial Markets (AFM). This licence is a requirement under European regulation for managers of alternative investment funds and enables us to continue to grow.

As this represents an important milestone for our organisation, we explain in this blog what the AIFMD licence entails, what changes, and what this regulatory framework means for you as a (prospective) investor.

1. Why is an AIFMD licence required?

Managers that manage alternative investment funds and offer fund interests to investors are, in principle, required to hold a licence under the Alternative Investment Fund Managers Directive (AIFMD).

Until recently, Marktlink Capital operated under the so-called AIFMD light regime, under which an exemption from the licensing requirement applies subject to certain conditions.

Once our assets under management exceeded €500 million, we no longer met the conditions for this exemption. This was the direct reason to initiate a full licensing process with the AFM.

2. What does the AIFMD licence entail?

With an AIFMD licence, Marktlink Capital is a licensed fund manager subject to supervision by:

the AFM (conduct supervision), and
De Nederlandsche Bank (DNB) (prudential supervision).

The licence means that the full AIFMD regime applies. This regime sets requirements relating to, among other things:

the organisation and governance structure;
risk management and compliance;
information provision and reporting to investors; and
capital and liquidity requirements,

with the aim of ensuring that we, as a fund manager, operate within a framework designed to safeguard investors' interests.

3. What changes for you as an investor (and what does not)?

Even prior to obtaining the AIFMD licence, the interests of our investors were already central to our operations. The licence does not change the nature of our services or our investment strategy and therefore does not result in a change of course.

What may become more visible is how information is presented. For example, our marketing communications must comply with an extensive set of rules aimed at clarity and transparency, and the information we provide in relation to our funds is subject to specific regulatory requirements.

4. How does this fit into our further development?

Obtaining the AIFMD licence was a planned step in the development of Marktlink Capital and a prerequisite for further (European) expansion and professionalisation.

Outlook 2026

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Wed, 21 Jan 2026 14:44:13 GMT

In this post, we look ahead to 2026, a year in which we will once again do everything we can to connect investors with the best opportunities in the private markets.

From a geopolitical perspective, 2026 has started off relatively turbulent, which understandably has implications for financial markets. At the same time, many market observers believe we are entering a favourable phase for M&A activity. Transaction volumes are picking up again, often referred to as the "thawing of the market." This is highly relevant for Marktlink Capital, as our first funds from the 2020 and 2021 vintages have entered the distribution phase. A supportive exit environment helps realise the value built up in the underlying funds.

A review of recent reports also shows a broad consensus among experts: in 2026, success will increasingly be driven by funds that demonstrate strong operational excellence. Historically, mid-market companies are where private equity can truly add tangible value. This is not a new insight—Marktlink Capital's strategy has focused on investing in funds that excel operationally in the mid-market from the very beginning, and we see no reason to deviate from this approach in 2026.

On the venture side, AI continues to dominate the conversation. 2026 will be the year in which it becomes clear which companies are genuinely able to benefit from the AI revolution, particularly at the application layer, where general models are refined into concrete apps and use cases. That said, it would be a mistake to narrow the discussion exclusively to AI. AI also serves as an enabler for the development of new technologies more broadly. With AI-assisted coding, deep research tools and similar innovations, the friction between idea and product continues to decrease. This theme is also highly relevant for private equity: funds that successfully deploy AI across their portfolio companies gain a clear competitive edge.

Societal interest in innovation and the private financing that supports it has increased in recent years. Shortly before the end of the year, former ASML CEO Peter Wennink published a report in which he sharply criticised the Dutch innovation ecosystem. According to the former CEO, there is significant work to be done; to remain competitive, hundreds of billions of euros will be required in the coming years to sustain Europe's economic position. This report builds on the recommendations of the well-known Draghi report, which highlighted similar challenges across Europe. In line with these findings, Marktlink Capital continues to contribute to a stronger European tech ecosystem by connecting private investors with leading European investment opportunities.

At Marktlink Capital, we will continue along the same path as in previous years. In 2026, we will once again offer carefully curated private equity and venture capital funds, strengthen partnerships with leading fund managers through feeder funds, and continue our expansion in Belgium. Earlier this month, we announced the renewal of our partnership with the Dutch top-tier fund Main Capital Partners. We also look forward to making 2026 another great year for the Marktlink Capital Investor Community. Keep an eye on your inbox for updates on the social, sporting and content-driven events we will be organising throughout the year.

The YOLO slider: how far are we willing to go with AI?

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Thu, 18 Dec 2025 08:30:00 GMT

At the Marktlink Capital Investor Day, Alexander Klöpping spoke about the lightning-fast rise of AI - and what lies ahead as the models escape the chat window in the browser and go on to control all aspects of everyday life.

First, a disclaimer: this piece was written and corrected entirely by hand, without the intervention of Large Language Models. It is a report from the Marktlink Capital Investor Day where we had invited Alexander Klöpping as the tech expert of the Netherlands to update the investor community on the impact of AI.

For venture capital and the investor community members who are in venture funds, AI is particularly relevant, because looking at the reports of the past months it is clear that a large and growing part of the available pool of venture capital is flowing to AI companies. It is also a topic for private equity investors, as funds need to invest heavily to keep their portfolio companies relevant and competitive. Much of the infrastructure of the AI revolution is made possible by private markets, as the construction of all those data centers is largely funded by private credit.

The question, however, is whether there isn't a bubble. The last time so much was pumped into new tech infrastructure, we subsequently experienced a massive dotcom bubble and, looking at history, we haven't seen such a massive wave of investment since the railroad bubble of the 1840s.

So the "bears" are apprehensive about a bubble, but the "bulls" believe that AI is enabling such a productivity boom that it really doesn't matter that so much is being built now. What's a few hundred billion in misplaced investment on this entire industrial revolution, Mark Zuckerberg of Meta said recently, and there are plenty of experts who agree with him.

Aside from the bubble, there are bigger existential questions surrounding AI. Yet Klöpping doesn't venture into the big questions and big answers in his story: technology is moving too fast and development is too elusive for that. Still, he does have four propositions for the audience that he does venture. In a row:

1. AI will not continue to look like a chatbot.

By now ChatGPT's little screen with the "what can I help you with today?" is already fairly well established, but Klöpping shows a number of examples of AI outside the browser. Take, for example, the glasses from Meta (formerly Facebook) that allow AI to watch you in real time. There are also devices you can hang around your neck that record, summarize and analyze all your conversations throughout the day. This was less liked by Klöpping's girlfriend, by the way, when she claimed once after a disagreement, "I never said that" - the AI had really heard it anyway...

2. AI writes code to make the AI better.

Until now, we consider AI mainly as something that is created by handy software developers. But of course, what those software developers did directly is program the tools to take their own work off their hands. At some point, this will go so far that computers will be able to program themselves, so to speak. What happens then is hard to predict. Klöpping quoted figures here from Amazon and Google, where already more than 80% of internally delivered code has been created by AI.

Another nice aspect of this point is that such programming AI is all "new" to us in the room, but for the new generation a responsive computer, tablet or phone is quite normal. Klöpping talks about how his little daughter, along with some classmates, is already building her own apps for schoolwork. For example, she recently built an app in Loveable to practice the tables, including "high scores" for the fastest calculators. A little parenting tip from Klöpping: yes, she is allowed on the iPad, but only if she builds the apps herself. So a whole generation is growing up that knows no better than that computers are adaptive, which in turn raises the question of how long static apps will remain the big beasts of software.

3. Computers do half of your current work.

On this point, the room naturally pricked up its ears: entrepreneurs are especially curious to see what AI will do for productivity. Not only our own, but also those of employees. Klöpping himself gave the example of Excel - despite working in Excel for years as an entrepreneur, he never got really good at it, but now, by simply asking Chat questions and uploading screenshots, you can suddenly pretend to be very good with the spreadsheets.

Elsewhere on the day, people also asked how that works for investment funds. A book review that used to take about three days is now done in a few hours, purely because AI has already mastered a lot of data sorting tasks extremely well. We also briefly checked this claim with our own investment team and the analysts could indeed confirm this.

In short: many boring things (such as endless Excel tweaking) will soon be done for you by the computer. What should we do then? Well, says Klöpping, above all ask yourself what the added value of your work is, what drives you and what you like: mainly do those things and let the models take care of the rest.

4. Someone around you will have an intimate relationship with a synthetic being.

This was perhaps the most shocking point - that ChatGPT and related models are not only productivity tools, but also serve as a synthetic substitute for friendships and relationships. It is already the case, Klöpping said, that most use of ChatGPT consists of questions that. So it is only a matter of time before someone in your immediate circle falls in love with a chatbot.

YOLO

Above all, Klöpping emphasizes that after decades of dabbling, developments are now suddenly moving so fast that they can hardly be kept up with. Whereas in 2023 we thought a video in which an AI-generated version of Will Smith was raking spaghetti in a most unnatural way was quite impressive, now AI video is everywhere and barely distinguishable from the real thing. So the question is no longer how we are going to accelerate development, but whether we should not apply the brakes. He takes the example of an AI tool for software development that has a "YOLO slider" that allows you to set how far you want to go in developing your app. The sliding scale goes from tentative - generate only a little code - to YOLO (you only live once, internet slang for a reckless leap of faith) - complete the product immediately and publish it straight away. The question is how far society is willing to go. Here the battle seems to be primarily between the tech bosses who want to accelerate to the max and the officials, especially from the EU, who want to encapsulate AI with all sorts of standards and regulations.

By the end of the talk, the room was already pretty impressed with the current capacity of AI models. "But," said Klöpping, "the AI you are using today is the very worst AI you are ever going to use." There is undoubtedly a lot more to come.

The apps Alexander Klöpping uses in his daily life:
1. Claude.ai
The best app for writing.
2. Shortwave.ai
Works concise instructions into neat emails.
3. NotebookLM.google
Transforms long boring texts into a podcast conversation, responds to questions.
4. Lovable
Encodes apps based on written instructions. Incidentally, a portfolio company of Marktlink Capital through our venture capital funds.
5. Whispr Flow
Rewrites whispered stream-of-consciousness monologues into readable texts.

This article has already appeared in the December 2025 Marktlink Magazine.

5 years of Marktlink Capital

Team Marktlink Capital — Tue, 16 Dec 2025 08:15:01 GMT

Timeline:

2020: founding Marktlink Investment Partners (MIP)
2022: founding Welt Ventures
2023: merger of MIP and Welt
2023: continued under the name Marktlink Capital
2023: launching secondaries strategy
2024: €1 bln. AUM exceeded
2025: €2.5 bln. AUM (now €2.8 bln), start Belgium

Many a successful entrepreneurial story begins with a gap in the market. Such is the case with Marktlink Capital: where large investors such as pension funds and insurers invest substantially in private equity, private investors were missing out. Indeed, access to private equity funds was difficult. High entry fees, intransparency ... only the big clubs were allowed access to the sector.

CarWise: how Marktlink Capital co-invests with Main Capital Partners in a European tech champion

Team Marktlink Capital — Mon, 15 Dec 2025 09:09:49 GMT

You might not immediately think about it when you step into your company car in the morning, but there is an entire world of software behind the fleet management of leasing companies. One of the leading players in this segment is CarWise. Since 1989, this company has been developing software solutions for leasing and rental companies. In 2025, the company was acquired by software investor Main Capital Partners. Marktlink Capital is participating in this transaction as a co-investor. Olivier Barge (Marktlink Capital) and Jeffrey Sanya (Main Capital Partners) explain what makes this deal so attractive.

First, a few words about co-investments. Put simply, a co-investment takes place when a private equity firm acquires a company as majority shareholder and another party joins as minority shareholder. This can be another fund, a company, or a limited partner (an investor in a private equity fund), such as Marktlink Capital. Sometimes a fund needs additional capital to execute larger deals, while co-investors obtain a (larger) stake in the transaction. Beyond purely financial motives, there are additional reasons for co-investments: funds can attract co-investors with deep expertise in specific regions or markets, and co-investors can use such transactions to further refine and strengthen their own investment strategy.

Collaboration between Main Capital and Marktlink Capital

This is clearly reflected in this deal, explains Jeffrey Sanya of Main: the initial transaction is already substantial in its own right, but on top of that, a significant additional amount is reserved in the fund for follow-on acquisitions as part of the intended buy-and-build strategy. In this strategy, companies in the same sector are added to CarWise to broaden the product offering, for example, or to accelerate geographic expansion.

For several reasons, it was desirable to involve external parties. So why Marktlink Capital? Here, the existing relationship plays an important role. Marktlink Capital has previously collaborated with Main on multiple occasions, including raising capital via fund-of-funds and feeder funds for Main Capital's funds. As a result, the parties can move quickly – something Marktlink Capital always strives for: a short deal turnaround time. In addition, Marktlink Capital brings other advantages, such as a broad network among entrepreneurs.

Smart, scalable and well-maintained software

Naturally, Marktlink Capital would not have entered into this deal if we did not, like Main, believe that this partnership has significant potential. First and foremost, the product itself is simply very strong: at Main, they compared the available providers and CarWise came out on top. Sanya describes the software as smart, scalable and well maintained. In addition, churn is very low, which indicates that users are satisfied with the software and tend to use it for many years, rather than switching to a competitor after a short period. The financial results confirm this picture: strong growth figures, best-in-class margins and solid operational profitability have already created a robust foundation.

Building on this foundation, there is substantial potential for European expansion. In the Netherlands, CarWise already holds a large market share in the mid-market segment, while abroad the market is much more fragmented. The Netherlands is also a clear frontrunner in the leasing market. The expectation is that other European countries will follow this trend – not least because Dutch providers are both crossing borders themselves and acquiring foreign players. As Sanya notes, leading companies in the Dutch leasing industry, such as Van Mossel and AutoBinck, are themselves very active in buy-and-build strategies to accelerate their international expansion.

Five out of five

In addition to room for expansion in breadth – through organic growth and acquisitions – there is still considerable potential to further deepen the product offering. For example, the leasing software is not only suitable for cars, but also for comparable assets such as bicycles, trucks, and more.

In summary, Barge concludes that this deal meets most of the key criteria that Marktlink Capital sets for an investment: a reputable fund with a strong track record, a robust product, a solid company, a clear growth trajectory (both organic and acquisition-driven), and ample scope for internationalisation. Marktlink Capital receives around 175 investment opportunities per year. Only a small percentage passes the very strict selection process – but with CarWise, everything came together.

This article was previously published in the December 2025 edition of Marktlink Magazine.

Investing in startups

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Mon, 17 Nov 2025 13:07:15 GMT

Introduction

Investing in startups is becoming increasingly popular. More and more investors are discovering that young companies offer a unique mix of innovation, scalability, and the potential for strong returns. At the same time, this form of investing requires realistic expectations and a solid understanding of the associated risks. Startup investments fall under the broader category of venture capital and focus on companies that are still in an early stage. In this article, you will learn how it works, what to look out for, and how strategic decisions can increase your chances of achieving attractive returns.

What Investing in Startups Involves

A startup typically focuses on an innovative product or a scalable business model but does not yet have stable revenue. Investing in startups means investing in potential. Unlike traditional investments, there is less certainty and more volatility, but if a startup succeeds, the increase in value can be significant. What makes startups particularly appealing is that they often operate in high-growth markets such as technology, sustainability, and digital solutions.

Why Startups Appeal to Investors

Startups have the agility to enter new markets quickly. They innovate faster than established companies, enabling them to challenge incumbents and gain competitive advantage. For investors, this means early access to future-focused sectors and the opportunity to participate before valuations rise. Startup investing also allows for meaningful diversification within a portfolio, offering exposure to emerging trends and new technologies.

Venture Capital and How You Can Participate

Venture capital is a structured way to invest in promising startups without having to select and assess each opportunity yourself. Venture capital funds review hundreds of companies, conduct due diligence, and actively support the entrepreneurs they back. For investors who want exposure to the startup ecosystem but prefer not to source and analyze every deal independently, participating in a venture capital fund is an attractive solution.
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How the Investment Process Works

Startup investing begins with deal flow: selecting companies that may be promising. This can happen through networks, incubators, accelerators, investor events, or online platforms. Founders typically present their company through a pitch deck outlining the problem, the solution, the business model, the team, and the market. Based on this, investors decide whether further analysis is worthwhile.

This analysis, or due diligence, includes financial, strategic, and legal assessments. The financial evaluation focuses on burn rate, runway, cost structure, and growth projections. The team is a critical factor: founders must have the right experience and complementarity to guide the company through different growth stages. Additionally, it is assessed whether the product truly addresses a market need and whether the competitive position is sustainable.

Forms of Startup Financing

There are several financing structures in startup investing. The most common is equity, where an investor receives shares and becomes a co-owner. Another frequently used structure is a convertible note, a loan that later converts into shares once the valuation is clearer. Revenue-based financing is an alternative where investors are repaid based on future revenue.

Two widely used instruments in early-stage investing are:

Equity: receiving shares in exchange for capital
Convertible notes: loans that automatically convert into shares later

The Importance of the Startup Ecosystem

Startups thrive within a strong ecosystem. Incubators and accelerators support early-stage companies by offering guidance, validation, and access to valuable networks. Corporate venture teams invest with a strategic focus, while crowdfunding platforms allow smaller investors to participate with lower entry amounts. This interplay between different players creates a dynamic market driven by continuous innovation.

The Key Risks

Startups often fail due to a lack of product-market fit, insufficient funding, or a team that lacks the ability to scale. For investors, this means the risk of losing the full investment is always present. Managing risk is essential and can be achieved through diversification, thorough analysis, and investing in sectors you understand. Active involvement can also help steer a company in the right direction when challenges arise.

How Returns Are Achieved

Returns in startup investing usually materialize only at an exit event. The most common exit is an acquisition by a larger company that is interested in the technology, product, or team. In other cases, investors may sell their shares to new investors through a secondary transaction. Initial public offerings are less common but can yield significant upside. The typical timeframe for a startup investment ranges between five and ten years.

Legal and Fiscal Considerations

Startup investing involves legal documentation such as shareholders' agreements, SAFEs, convertible notes, and voting rights arrangements. Protecting intellectual property is crucial, as it often forms the core of a startup's competitive advantage. Additionally, some countries offer tax incentives for early-stage investments. It is important to seek advice when reviewing contracts and understanding fiscal implications.

Strategies for Successful Investing

Long-term vision and a clear strategy are essential for success. Diversifying across multiple companies and sectors helps reduce risk. Industries such as AI, sustainability, and health technology show strong growth potential. Many investors choose to be actively involved in the startups they back, as their expertise and network often have a direct impact on the company's chances of success.

Trends and Technological Innovations

The startup investment landscape is evolving quickly. Impact investing and sustainable technology are becoming increasingly important. AI plays a growing role in assessing companies and markets, while blockchain is enabling new financing methods. These developments create new opportunities for investors and continue to expand the range of available investment structures.

Conclusion

Investing in startups offers a unique opportunity to support innovation while aiming for attractive long-term returns. It requires knowledge, patience, and a structured investment approach, but for those willing to dive deeper, it opens the door to a dynamic market full of potential. With the right strategy, diversification, and involvement, investors can gradually build a strong portfolio within the world of fast-growing early-stage companies.

What are secondaries?

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Tue, 07 Oct 2025 12:17:59 GMT

What Are Secondaries?

Secondaries (or "secondary transactions") are the purchases and sales of existing interests in Private Equity funds or portfolios, rather than investments in new funds (known as primary investments).

There are two main types of secondaries: LP-led and GP-led.

LP-led Secondaries

In LP-led secondaries, a Limited Partner (LP), such as a pension fund or family office, sells its interest in one or more PE funds to another party. This can be done to restructure portfolio risk, generate liquidity (a nice way of saying the transaction frees up cash), or adjust investment strategy. The buyer takes over the existing rights and obligations of the selling LP, including future capital commitments and the claim on fund distributions.

GP-led Secondaries

GP-led secondaries are initiated by the General Partner (GP), the fund manager of a private equity fund. In these transactions, (part of) the portfolio from an older fund is transferred into a new vehicle. Investors in the old fund can choose to sell their stake or roll it over into the new fund. These deals are often used to hold on to valuable assets for longer or to raise additional capital for further growth.

Secondaries at Marktlink Capital

At Marktlink Capital, we also work with secondaries in several ways. Firstly, we include secondary funds in our funds-of-funds as part of our diversification strategy. We also offer direct feeder funds into secondary funds.

Why Secondaries?

Secondaries offer flexibility in a market where investments are typically locked in for the long term. Both LP- and GP-led transactions are playing an increasingly important role in the professionalization and expansion of the private equity sector.

The main advantage of secondaries for investors is that sellers often offer their positions at a discount to the fund's net asset value, allowing buyers to enter at an attractive price—essentially creating an instant uplift in value.

Another benefit is that buying into secondaries is not a blind commitment. You're acquiring a stake in an existing portfolio or a company that has already been under private equity ownership for some time. This also shortens the investment horizon significantly, as you're entering a deal that's already in progress—something many investors find appealing.

entrepreneurial, passionate, and genuine: entrepreneur and investor Wout Jan Wessels Boer

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Tue, 08 Jul 2025 11:56:41 GMT

Wout Jan Wessels Boer explains how he leverages the power of Marktlink in his entrepreneurial journey in three ways: as a dealmaker, as a talent network, and as an investment opportunity that gives access to strong private equity funds.

You'll find them in many Dutch households: the sandwich makers from Tristar, the fryers from Princess – household products from the Smartwares Group have been well-known for years. Wout Jan Wessels Boer helped grow the brand as CEO. And successfully so, as the group saw solid growth year after year. During this successful tenure, his entrepreneurial spirit began to stir. At a certain point, the company had grown so large that it increasingly resembled a corporate entity. Wout Jan found himself spending more time in meetings than on actual entrepreneurship. He sold his shares in the group, together with his financial partner Arnold Bergsma, and they started Findyourgroup, a cluster of trading companies.

Findyourgroup's companies operate in areas such as interior design, office products, printing, installation, and climate control for commercial spaces – essentially, everything a business needs in and around its premises. Findyourgroup focuses on family businesses. These can come from various sectors, but what they often share is a challenge around succession. Findyourgroup supports them with advice and shared services like administration and marketing.

It's also important that the companies have sufficient growth potential. It's precisely the realization of this growth that gives Wout Jan and his partner the most satisfaction.

Drive and Inspiration

According to Wout Jan, the biggest challenge is replacing the entrepreneur. The drive and inspiration a business is built on cannot simply be replaced by a random manager. That's why Wout Jan spends much of his time searching for the right people. As his entrepreneurial journey progresses, he becomes increasingly convinced that the human factor is decisive for a company's success.

Another way this human element comes through is in how the organization is managed. The partners at Findyourgroup use a holacratic governance model, a term that might require some explanation. This model strongly relies on the idea that every employee – from top to bottom – should have the maximum freedom to perform their role according to their own insight and experience. No top-down management, but a system in which employees are trusted and empowered to shape their roles. This also means management must create space for initiative and show that making mistakes is acceptable – because entrepreneurship inherently involves taking risks.

Ultimately, Wout Jan says, the goal is to avoid becoming a sluggish oil tanker, and instead operate as a fleet of agile speedboats. To succeed in such a model, they look for people with the right traits. Wout Jan distills them into three core characteristics: entrepreneurial, passionate, and genuine.

The Marktlink Triple

Marktlink supports Findyourgroup in three ways along their entrepreneurial journey. First and foremost, as a dealmaker: the gentlemen ended up at Marktlink because the first company they acquired, Europel, was introduced by a Marktlink dealmaker. And it didn't stop there – Office Topper was also added to the group via Marktlink.

Secondly, Marktlink's network is highly valuable. It offers contact with like-minded entrepreneurs, knowledge sharing, and warm connections for new ventures. Wout Jan recalls attending a Marktlink event – the car rally in Tyrol – where he met an entrepreneur who had just sold his business and was looking for a new challenge. That person, Mark Bos, eventually joined Findyourgroup as one of the working partners, now managing part of the group.

Thirdly, Wout Jan invests through Marktlink Capital's fund-of-funds. With his extensive experience in private equity – both as an executive in PE-backed companies and through his own investments – he understands the sector well. That builds confidence. He shares his golden rule for investing: only invest in products you understand.

What's Next for Findyourgroup?

So where is the Findyourgroup journey heading? Wout Jan has an exclusive scoop for Marktlink Magazine: with a smile, he reveals that their next step will likely be a return to household appliances. In this market – one he knows like the back of his hand – the Findyourgroup team sees several promising opportunities on the horizon. The joy of entrepreneurship shines through in the way he shares their plans. Watch this space!

MCart

We meet Wout Jan at one of his companies: MCart. This business is a signmaker – a company that produces signage, wayfinding systems, advertising displays, and more. It goes far beyond simple signs: using acoustic felt, eco-friendly cork, and a range of computer-controlled printers and plotters, the company produces high-quality items, from meter-long acoustic walls with colorful prints to displays.

The company is based just outside Rotterdam, amidst the shipyards and transport firms of the Alblasserwaard region. From the outside, it looks like a typical industrial building – one of many. But inside, it's a vibrant and creative space. A true playground, say the signmakers working there. Every square centimeter is covered with the materials and colors that MCart uses, making the office and production space one big showroom for the craftsmanship MCart delivers.

The holacracy is evident in the work atmosphere: enthusiastic and dedicated makers speak with joy about the materials and machines they use.

The Key Parameters of a Fund Explained

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Fri, 06 Jun 2025 09:37:02 GMT

Private market funds come in all shapes and sizes. Before investing, it's important to understand how such a fund is structured. In this blog, we explain four fundamental parameters that you'll frequently encounter: fund size, hard cap, vintage, and fund term. These factors apply to all types of funds, including PE funds, funds-of-funds, and feeder funds.

What Is Fund Size?

The fund size refers to the total amount a fund aims to raise from investors during the fundraising phase. This size determines how much capital is available to invest in companies over the life of the fund.

A smaller fund (for example, €100 million) typically invests in SMEs or startups, while larger funds (over €1 billion) focus on bigger buyouts or international growth strategies. The fund size has a direct impact on the risk profile, the type of investments, and the expected returns.

What Does Hard Cap Mean?

The hard cap is the maximum amount a fund is allowed to raise, as defined in the fund documentation. It acts as a strict ceiling: even if investor interest exceeds expectations, the fund may not surpass the hard cap.

The hard cap protects investors from a fund becoming "too large," which could make it harder to find high-quality investment opportunities. It keeps the fund focused and manageable—thereby increasing the likelihood of strong returns.

What Is a 'Vintage'?

You might recognize the term "vintage" from the world of wine, where it refers to the year a wine was produced. In the context of a fund, vintage refers to the year in which the fund makes its first investment. This parameter is important for benchmarking: it allows you to compare funds with the same vintage to evaluate performance.

And yes—just like with wine, some years perform better than others, largely due to broader economic conditions. That's why vintage is also relevant for timing. A fund launched during an economic downturn can benefit from lower entry valuations, while a fund with a vintage in an economic boom may face higher entry prices.

What Is the Term of a Private Equity Fund?

Private equity funds are generally closed-end funds with a fixed term, usually between 8 and 12 years. This term is roughly divided into three phases:

Investment period (3–5 years): The fund actively seeks and selects portfolio companies.
Value creation or management phase (3–7 years): The fund actively manages and optimizes the portfolio companies.
Exit phase (last 2–3 years): The fund sells its stakes—via a sale or IPO—with the goal of distributing realized returns to investors.

For investors, this means a relatively illiquid investment. At the same time, the long horizon allows for structural value creation, which is essential for achieving attractive returns.

Why Are These Parameters Relevant for Investors?

As an investor, you want to understand not only what a fund invests in, but also how the fund is structured. Parameters like fund size, hard cap, vintage, and term provide insights into the fund's scale, strategy, and market positioning. Together, they form a crucial part of the due diligence process when selecting a suitable private equity fund or fund-of-funds.

Understanding Leveraged Buy-Outs in Private Equity

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Tue, 15 Apr 2025 06:00:00 GMT

You may have come across the term leveraged buy-out in the context of private equity and wondered what it means.

Leveraged buy-out

The term is divided into two parts: leveraged and buy-out. Starting with the latter, private equity was originally intended as an alternative form of business succession, where an entrepreneur was bought out—hence the name buy-out. These buy-outs still exist and continue to form the core of private equity. The term leveraged means that the buy-out is conducted with a lever (leverage in English) of debt. When a buy-out fund makes a purchase, part of the purchase price is borrowed from one or more banks, with the company as collateral. The leverage effect is that as a fund, you can enter larger companies with less of your own money.

Leverage ratio

A simple example: if a fund acquires a company worth €150 million and invests €50 million from the fund itself and borrows €100 million from the bank, then a leverage of €100 million is applied. Important here is the leverage ratio, or the ratio between cash from the fund and debt at the bank. The greater the ratio of debt to equity, the higher the risk.

Alternatives to leverage

Leveraged buy-outs have not had the best reputation due to a few notorious cases, especially in the 1980s when the category was still new and large risks were taken with the amount of debt placed in a company. As private equity further developed as a sector and the wild 1980s receded into the rearview mirror, the percentage of leverage in deals has steadily declined. Nowadays, besides bank loans, there are many more instruments for buy-out funds to finance their purchases. For example, co-investments, private debt solutions, and other forms of capital are now used. As the sector relies less on bank debt, the term leveraged buy-out has gradually faded from view.

Understanding the J-Curve: Cashflow Insights for Private Equity Investments

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Thu, 10 Apr 2025 07:33:33 GMT

A picture is worth a thousand words; this is certainly true for graphs as well. One of the most important graphs that provide insight into how investing in private markets works is the "J-curve." The J-Curve – in a stylized manner – shows how the cash flow of your investment in a fund-of-funds can progress.

The J-Curve

As always with a graph, it's important to look at what is on the axes. Vertically on the y-axis are euros, and horizontally on the x-axis, we find time in years. The line you see is a trend line through a number of bars, and together they express the cash flow.

The euro axis does not only show positive numbers. As you can see, the line dips below zero in the first few years, reaches a break-even point at a certain moment, and the cash flow becomes positive thereafter. This means that in the initial years, you deposit money, and after the break-even point, you receive money until the graph stops.

Capital Calls

When we look at the underlying processes, it becomes clear where this curve originates. The line starts to move when the capital is committed. This essentially means that you pledge an amount to a selection of funds, which then seek out companies to invest in. Once they have found suitable companies and proceed with the purchase, a capital call follows: a request to fulfill your share of the purchase amount. In the first 4 to 5 years of the fund-of-funds, these capital calls continue until the funds have roughly reached the committed amount.

After a few years of adding value, the companies are initially sold again. Then the cash flow reverses, and you receive your share of any proceeds. When all companies from the underlying funds have been sold, the investment process is completed, and the line ends back at zero.

Returns

The return is therefore the difference between what you have paid below the line and what you have received above the line. Viewed differently, you have a positive return if the right bump above the line is larger than the bump below the line. In reality, the graph looks slightly different. At the start of your investment, you transfer a minimum amount, from which the initial investments are made. Also, the transition from net payment to net receipt is not a sharp cut: often money returns from the funds earlier, but it is reinvested in new deals. This process is called recycling.

Additionally, the cash flow profile varies per fund, depending on the nature of the fund. Broadly speaking, you can say that funds investing in secondaries generate distributions faster because they continue existing investments, while investment funds focusing on fundamental technology startups (deep tech) have a longer profile with more distributions towards the end. This is because the development and rollout of technology simply take longer.

The J-curve is thus an indicative illustration of the average cash flow profile of the underlying funds within a fund-of-funds and not a guarantee for future cash flows or results.

Private equity: What is a Buy & Build-strategie?

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Tue, 04 Mar 2025 13:09:59 GMT

You might have come across the term in newspapers or on private equity fund websites: Buy & Build. This refers to a well-known strategy in private equity to create value by combining multiple companies into a larger group and subsequently selling that group at a premium.

Scaling up

In its most basic form, a buy & build strategy involves acquiring and integrating multiple companies within a specific sector into a single enterprise. This is often done to capture the benefits of scale, such as shared IT systems and centralized administration.

In practice, there are several variations. Often, a company with scale and a strong brand position is used as the foundation of the group. This company is referred to as the “platform,” while the companies that are added are known as “add-ons.” Another variation involves acquiring complementary businesses to build a vertically integrated value chain rather than combining similar companies.

Strong brands

When executing a buy & build strategy, investors must make key decisions, particularly around integration and management. Will existing brand names be retained? Will companies continue to operate independently?

The answers vary by sector and situation. A well-known example is the software group Visma. With the support of private equity, this originally Norwegian company has acquired dozens of software businesses. These companies often retain their own brand and management, while benefiting from shared services such as HR, development and sales infrastructure. This allows them to leverage the scale and network of the broader group.

Investing in private equity is possible at Marktlink Capital starting from €250,000. Want to know more? Then contact our team.

Differences Between Private Equity and Venture Capital Explained

bouke@marktlinkcapital.com (Bouke Marsman | Managing Partner) — Tue, 18 Feb 2025 14:56:09 GMT

Venture capital and private equity are popular among professionals working in fields such as tax advisors, lawyers, and accountants. They offer them the opportunity to diversify their portfolios beyond traditional investments, such as stocks. Although private equity and venture capital funds may seem very similar at first glance, there are important differences between them. Below, the three main differences are explained.

Innovation versus efficiency

If we were to put it very broadly, the difference between private equity and venture capital is the difference between a focus on innovation and a focus on efficiency. Venture capital targets companies developing new technology and entering immature markets, while private equity aims to make existing companies operationally stronger and better positioned in existing markets.

Entrepreneurial relationship

Another important point of difference is that venture capital typically provides capital to entrepreneurs to help grow their business while the entrepreneurs themselves remain as management and the face of the company. Think, for example, of how venture funds supported Mark Zuckerberg in expanding Facebook into a global player. In private equity, the investment is often used to buy out the entrepreneur. Consider, for instance, an entrepreneur who wants to retire or a founder who transfers their business to a company in the same sector under the control of private equity as part of a buy & build strategy.

Minority/majority

It is also good to know that private equity typically works with majority stakes, while venture capital deals with minority stakes. For private equity, having control over operations is crucial, so PE funds prefer to hold a majority of the shares. This gives them the ability to intervene when necessary. In venture capital, risk diversification is more important, so interests in a company are often spread across multiple funds. This also helps bring in expertise and skills to support the founders of a startup. Take, for example, a software company providing services to the healthcare sector: if you are developing something like this, it helps to have an investor on board who is skilled in nurturing software companies and one who knows everything about the healthcare market.

Venture capital is riskier by the nature of the investments, but it also yields higher returns when successful. A balanced investment strategy with a good mix of risks and opportunities therefore includes investments in both types of funds. Marktlink Capital makes this possible through the fund-of-fund programs.

Consistent returns at Main Capital Partners

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Tue, 18 Feb 2025 09:38:18 GMT

€2.5 billion raised and a series of remarkable deals: 2024 has started excellently for Main Capital. Managing Partner & Head of Benelux Sjoerd Aarts updates us on the state of affairs at the B2B software specialist.

2024 so far: 5 strategic exits, 13 acquired platforms, and 28 buy-and-build investments. €2.5 billion raised
Returns are above average: the recent exits yielded a money multiple of nearly 5.3x
Focus on one-on-one deals: Main is a trusted partner with a large network in the B2B SaaS market.

2024 has been a busy year so far for Main Capital Partners, one of the fund managers in the portfolio of Marktlink Capital. Managing Partner & Head of Benelux Sjoerd Aarts talks about the flying start the software specialist has made: "We look back on a very successful first half of the year for the funds of Main Capital Partners. Looking at all the funds and all the deals, we have so far in 2024 invested in no less than 13 platform companies, completed 28 add-on acquisitions, and realized 5 strategic exits." Additionally, Main Capital has raised two new funds: Main Capital VIII and Main Foundation II, valued at €1.9 billion and €500 million, respectively.

One of the platform companies that Main Capital recently acquired is RiskConcile, a Belgian company that provides software to businesses in the field of "Reg Tech" – software that companies need to get a grip on complex laws and regulations. This sector is rapidly emerging, a fact reflected in the company's growth figures. "It is a very impressive company. In software, we often look at the 'Rule of 40', which states that the sum of the revenue growth percentage and the EBITDA margin should be more than 40. RiskConcile is closer to 100, so the company is growing very rapidly and profitably."

One-on-one 

What stands out about Main's deals is that they are primarily conducted one-on-one, without the involvement of auctions or competitive M&A processes. This is due to Main's strong network and twenty years of investment experience, says Aarts: "We currently know more than 15,000 software companies active in the regions we focus on. This allows us to build those relationships and generate our own deal flow. Of all the transactions we do, 70 to 80 percent are one-on-one transactions, without an M&A advisor on the other side."

Entrepreneurs are eager to partner with Main due to the investor's track record, Aarts states: "We are seen as a thought leader in the software industry because of the knowledge and experience we have gained over the past 20 years in strategically expanding software companies."In the RiskConcile deal, this experience also plays a role, as Main has already gained experience in the Reg Tech sector with the company Cleversoft. This company was successfully sold to Levine Leichtman Capital Partners after an intensive growth trajectory. "We know the RegTech market well because of this, and we can apply our experiences and lessons learned again."

Strategic exits

Also on the exit side, the Main Capital team knows the market so well that they generally have a good idea of whom they want to sell to. Aarts provides the example of Textkernel, an HR company that was recently sold to the American company Bullhorn. Main is already well-acquainted with Bullhorn from a previous transaction and has always considered it one of the logical strategic buyers for Textkernel. Besides Textkernel, Enovation was reportedly sold for more than EUR 500 million to the French publicly listed company Legrand, and Optimizers was sold to strategic buyer Orisha. This network on the exit side also pays off: this year, nearly €1.2 billion was sold to strategic companies.

Top Performing Private Equity Fund Manager

The good results have not gone unnoticed. Recently, Main Capital won an award for Top Performing Private Equity Fund Manager, presented by data provider Preqin. According to Aarts, the award is a testament to Main Capital's consistently strong performance: "Preqin calculates this based on the performance of all funds, not just one successful fund or a single good deal. The process is very focused on how consistent the performance is. And of course, we are engaged in this daily, demonstrating consistently good performance and consistent returns. This is also reflected in the numbers: we currently have 34 realized exits and, on average, have earned more than four and a half times our money on all those exits. Looking at the exits we have realized and plan to do in 2024, we expect to achieve an average money multiple of five times, so you could say there is an upward trend. This is partly due to our sector focus on B2B software companies and a sharp strategy regarding expansion and profitable growth."

State of Dutch Tech

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Tue, 18 Feb 2025 09:21:30 GMT

Wanted: entrepreneurial role models for the Dutch tech ecosystem.

It's somewhat like the King's Speech for innovative Netherlands, The State of Dutch Tech. With a speech from the Prime Minister and a lot of figures about innovation and investment in the Netherlands, the country receives a sort of report card on the state of tech in the nation.

Two figures tell the story. -35 and 3.1. Let's start with the good news: the 3.1 stands for the 3.1 billion euros that were invested in tech in the Netherlands last year. That's a lot - among the European top four - and unlike in other countries, a higher amount than in previous years. So far, so good.

But then the -35. That is the alarming 35% drop in the number of Dutch startups that raised more than €100,000. We can read two things into this. Firstly, that the money is increasingly going to scale-ups that are in a further stage of growth, and therefore less risk is being taken in the early stage. This is dangerous because the companies that reach the top are a direct function of the number of enterprises at the base. Less early stage thus equals fewer success stories.

Secondly, it may say something about the entrepreneurial climate in which fewer people are simply taking the step to start an innovative company. That is perhaps even more concerning, as after a few years of growing entrepreneurship (young talent) now more often chooses a different path. This decline in entrepreneurship is not good news, especially now that tech is increasingly becoming the focus of a geopolitical power play between the US, Europe, and the Asian powers.

Help us accelerate, one of the speakers therefore asked, because the US and Asia are going all in - so ask yourself what you can do to help.

Well! By investing in tech companies, either as an angel investor or through one or more funds, you contribute to a healthy Europe-wide ecosystem for growth and venture capital.

That's already a nice step. However, money is not the only issue. During the day, there was a lot of talk about cultural change: in the Netherlands (and in Europe), we could dare a bit more. Dare to undertake, dare to fail, dare to look beyond the barriers to start successful companies.

To stimulate entrepreneurship, role models are very indispensable: successful entrepreneurs should show themselves a bit more to inspire the next generation, everyone at The State of Dutch Tech agreed on that. And one more thing: the Chief Executive of the European Investment Fund also advocated for private investments in private markets.

Marjut Falkstedt said that an investment category like venture capital is indeed relatively volatile, but with proper diversification, good returns can be achieved. And that is precisely the fundamental proposition behind the venture funds of Marktlink Capital.

The entire report by Techleap on The State of Dutch Tech can be read here.

A steel chin from falling

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Tue, 11 Feb 2025 13:02:59 GMT

Perseverance and optimism, according to Pieter Schoen, are the key traits of a successful entrepreneur and investor. At the Marktlink Capital Investor Day, he shared his story.

Are entrepreneurs born or raised? The answer likely lies somewhere in between, but in Pieter Schoen’s case, his entrepreneurial spirit was sparked at an early age. Since he didn’t receive pocket money, he started earning early. Delivering newspapers and washing cars were just the beginning. He quickly learned he could scale by hiring classmates while focusing on sales.

He also explored small business opportunities, such as importing branded clothing and selling trendy items to classmates. Even then, the foundations of entrepreneurship were clear.

Although studying wasn’t an obvious path, Schoen pursued Business Administration at Erasmus University. His first real success followed with the Career Choice Book. Together with Harald Swinkels, he created a guide featuring insights from successful professionals. The book became a major success, selling 300,000 copies and generating €750,000 in its first year.

Internet's Wild West

After this success, Schoen saw the publishing industry changing rapidly. In the late ‘90s, the internet opened new opportunities. Together with his partner, he developed a virtual job fair on CD-ROM, allowing companies to present themselves digitally.

The concept worked: companies paid for digital exposure, and candidates were matched automatically. Growth followed quickly, with €10 million in funding, expansion to six countries and rapid hiring.

But during the dot-com boom, valuations soared unrealistically. Schoen declined multiple offers, believing in further growth. When the bubble burst, the company collapsed and was eventually sold for a fraction of earlier valuations.

Optimist till the very end

Many entrepreneurs would have stopped after such a setback. Not Schoen. He describes himself as an “optimist till the end” and believes every failure is the start of something new. One of his well-known quotes: entrepreneurs need to “develop a steel chin from falling.”

His next major success came in the liberalized energy market with the Nederlandse Energiemaatschappij (NEM). Through bold marketing and competitive pricing, the company quickly grew.

Despite controversy and criticism, the business thrived. Eventually, Schoen exited the company for a substantial amount, reportedly between €200 and €300 million.

Retirement was never an option. Instead, he transitioned into investing.

Today, Schoen runs his family office, Shoe Investments, focusing on direct investments, fund investments, real estate and listed equities.

From software to cool glasses

Schoen invests directly in scale-ups with tickets between €2 and €10 million. His portfolio ranges from software companies to niche businesses like biodegradable coffins and eyewear brands.

He also invests in funds via Marktlink Capital. This provides diversification and access to top-tier private equity managers such as CVC, Egeria and Main Capital.

As Schoen puts it: “Money should sweat.” Fund investments complement his direct investments effectively.

What’s next?

Schoen aims to reach €1 billion in assets under management by 2032. He focuses on building strong teams and aligning incentives across the organisation.

His philosophy is captured in the phrase “No hassle, get rich together.” Every employee shares in the company’s success, creating a strong culture of ownership.

Even at home, entrepreneurship is encouraged. Instead of giving pocket money, Schoen matches what his children earn, sometimes leading to surprisingly creative business ideas.

This article was originally published in the Marktlink Capital Magazine. You can read the full magazine here.

Outlook 2025: These are the key macrotrends in private markets

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Fri, 07 Feb 2025 14:20:05 GMT

In this blog, we take you through the key macro trends affecting private equity and venture capital and explain what this means for the investment strategy of Marktlink Capital.

The first major trend is that private equity and venture capital are growing as sectors. For example, companies are increasingly choosing to remain private for longer and not apply for a stock market listing. This is now possible because the private capital market is broader and deeper than before. Increased regulatory pressure on listed companies also plays a role in the decision to remain private for longer.

Furthermore, we expect that in 2025, opportunities will mainly lie in the segment commonly referred to as the (lower) mid-market, or the SME and SME+ segment of the market. For companies of this size, deals are less dependent on the now more volatile interest rates, and there is more room for operational improvements.

Another trend expected to continue in 2025 is the popularity of secondaries.

The market for these investments is maturing, and more funds and investors are able to use this instrument to achieve impressive results with an attractive cash flow profile.

For venture capital, after years of relative overvaluations and 'free money' due to low interest rates, it is now a period of normalization. However, the major trends here are less in the economic sphere and more in the technological, as the rise of AI now presents significant opportunities for entrepreneurs to bring AI-related applications to the market.

The inauguration of a pro-business government in the United States is, on one hand, good news for private markets, but on the other hand, tariff barriers pose a risk for internationally operating companies. In Europe, political momentum is slowly building for further integration of the fragmented European capital market and the promotion of entrepreneurship.

What does all this mean for our funds? In the area of private equity, we continue to seek the best funds in Europe and the US in the SME segment, where the opportunities for value creation in this changing world are greatest. For venture capital, we will increasingly connect with parties that have the best vision for developing and commercializing AI applications.

First Class investing in Secondaries

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Fri, 07 Feb 2025 13:53:52 GMT

The market for existing positions in investment funds or companies is experiencing significant growth. Remko van der Erf from Intermediate Capital Group explains, using data, why investing in these "secondaries" can be an attractive option.

In the secondary investment market, existing positions in investment funds or companies are sold. The investors in this market are often large institutional investors such as pension funds, family offices, or insurers—so-called limited partners. They can sell their fund participation to other limited partners or specialized funds that exclusively invest in secondary positions, like ICG.

There are two types of secondaries: LP-led secondaries and GP-led secondaries. LP-led secondaries are driven by the liquidity needs of investors in PE funds. This involves large institutional investors such as pension funds, family offices, or insurers, a group we refer to as Limited Partners (LPs). This group periodically needs liquidity for various reasons. This can be due to changes in the investor's strategic investment policy or because the investor's investment portfolio becomes unbalanced. The GP-led secondaries category mainly consists of positions in 'continuation vehicles,' structures where investments in companies from expiring funds are placed so that PE funds can hold these investments longer, for example, to add more value or to complete an integration after an acquisition. In these transactions, the General Partners—the GPs—of the PE funds take the lead.

What are the main differences between investing in a secondaries fund and a typical PE fund?

A clear difference from a typical PE fund is the duration. Secondaries investments generally have a shorter remaining duration and are more liquid because the funds have been active for years before you step in. This helps mitigate the 'J-curve' effect, where the investment and 'harvesting' periods are shortened. Additionally, in some cases, there can be early unrealized returns because transactions can be closed at a discount compared to the intrinsic value (NAV). The average discount in PE secondaries transactions in 2023 was about 9%.

Average discounts on LP portfolios (% below NAV).

Source: Jefferies (2024). 2023 Global Secondary Market Review.

"Both GP-led and LP-led secondaries generally offer diversification advantages compared to typical PE funds. In LP secondaries, this advantage is greater than in GP-led secondaries, simply because more portfolio companies are usually part of a transaction, encompassing more diverse sectors, vintages, and regions.

Finally, there is more transparency in secondaries, meaning better insight into what is in a portfolio before you invest. In LP secondaries, you have a clear view of the companies in the portfolio you are purchasing, while the underperforming companies are usually already (partially) written off. In the case of GP-led secondaries, the fund manager tries to "cherry-pick" the best companies from portfolios and acquire them at an attractive valuation. All of this makes investing in secondaries funds highly complementary to investing in traditional PE funds."

Indicative cash flow profile for an investment in a secondaries fund compared to a primary fund.

Source: Marktlink Capital (2023).

What risks and considerations should investors in secondaries funds take into account?

In addition to general macroeconomic factors such as economic growth and interest rate developments, it is important to avoid pitfalls in secondaries. The discipline of the fund manager and the concept of "stick to your knitting" are important here. LP-led secondaries and GP-led secondaries are fundamentally different strategies, and we believe that specialized knowledge and skills are needed for both. In LP-led secondaries, the results are generally more stable because diversification on multiple levels is inherent to the strategy. In GP-led secondaries, you can aim for higher returns due to higher concentration, but the return will be more dependent on the performance of a few companies and possibly somewhat more volatile. If you analyze specific companies for a GP-led deal, you must be able to put yourself in the role of a buyout investor. While if you have to analyze a portfolio of dozens of funds and hundreds of companies under time pressure, as in an LP-led secondaries deal, you need different qualities, network, and data and technology.

Distribution of net Internal Rate of Return ('IRR') per investment category.

Bron: Brain Global Private Equity Report 2024. Grafiek heeft betrekking op vintage jaren 2000-19, actueel per Q2 2023.

What is the current market dynamic and what are the driving forces behind the strong growth of the secondaries market at the moment?

The secondaries market has grown significantly in percentage terms over the past decade, albeit from a small base. While in 2023 there were approximately $3.2 trillion in portfolio companies in PE funds (28,000 companies), the secondaries transaction volume was relatively modest at over $110 billion (see figure next to it). For comparison: in the market for publicly traded stocks, $200 billion is traded daily in the US alone. The light gray line on the graph to the right indicates what portion of the entire PE market consists of secondaries. This was about 8% in 2023, indicating significant growth potential for the future.

When we look at the supply side of the secondaries market, or the investors who want to sell their participations, we see that the liquidity needs of fund investors and particularly the growth of GP-led secondaries have been a driving force behind recent market growth. The demand side consists of parties eager to acquire secondaries positions. The demand for secondaries investment opportunities is currently high, thanks to generally strong returns, a lower risk profile, and more liquidity due to a shorter investment horizon. Research by Bain shows that this is the only category in which even the fourth quartile delivers fully positive returns (see figure below). Within the secondaries market, GP-led secondaries have recently grown faster than LP-led secondaries and now take an almost equal share in terms of total annual transaction volume (see graph below).

Private equity secondaries transaction volume and assets under management ('AUM').

Source: Prequin (per january 2024).

1. Current asof Q3 2023

Will the growth of the secondaries market be sustained in the coming years?

We believe that the secondaries market will continue to offer ample opportunities for double-digit growth in the coming years, as the total PE market is much larger (and still growing) and the need for liquidity is undeniable. Furthermore, the GP-led market is becoming increasingly institutionalized, which promotes growth.

What are feeder funds?

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Fri, 07 Feb 2025 13:32:07 GMT

In this blog, we explain what feeder funds are and why they can be a valuable addition to your investment strategy.

What exactly are feeder funds?

A feeder fund is an investment vehicle that pools capital from multiple investors to invest in a single private equity or venture capital fund. Unlike a fund-of-funds—where you invest in a diversified basket of funds—a feeder fund allows you to invest directly into one specific target fund.

You may already know Marktlink Capital from our fund-of-funds, where you, as an investor, gain access to a broad portfolio of private equity or venture capital funds. A feeder fund, however, focuses on a single underlying fund. We offer these feeder funds for leading names like Parcom, Egeria, Forbion, and secondaries funds from ICG and CVC. Through Marktlink Capital, you gain (exclusive) access to top-tier funds with a strong track record.

How do feeder funds work?

Feeder funds serve as a conduit between you, the private investor, and the underlying private equity or venture capital fund. Your investment is pooled with those of other investors and then collectively invested into the target fund. This structure gives you access to high-performing funds that are typically reserved for large institutional investors.

Benefits of feeder funds

There are several compelling reasons to consider feeder funds alongside your fund-of-funds investments:

Exclusive access to top-tier funds
Feeder funds offer direct exposure to the winning strategies of leading funds. Normally, such access is difficult due to high minimum investment requirements—often in the millions. Through our feeder funds, we bundle commitments from individual investors like you, making this type of access possible. Just like with our fund-of-funds, our mission is to open the door to top-performing funds for private investors.

Targeted portfolio positioning
Feeder funds allow you to place specific accents in your portfolio. By choosing funds with a clear sector focus or strategy, you can align your investments with your broader financial goals. Think of themes such as AI, healthcare, or sustainability.

Attractive cash flow profile
Not all funds have the same cash flow profile. The pace at which capital is called and returned can vary. Many investors choose a secondaries feeder to optimise their cash flow profile. Since secondaries funds invest in mature fund portfolios or companies, they tend to have shorter fund lifecycles, meaning capital is typically deployed and returned faster than in traditional PE funds.

Feeder funds vs fund-of-funds: what's the difference?

The key difference between feeder funds and fund-of-funds lies in diversification:

Feeder funds: You invest in a single specific fund, which may carry more risk but also greater potential returns if the fund performs well.
Fund-of-funds: You invest in a basket of 10–20 different funds, providing broader diversification and a more moderate risk-return profile.

Both options complement each other well in a balanced investment portfolio.

Investing in feeder funds with Marktlink Capital

At Marktlink Capital, we only select feeder funds from well-established names with a proven track record. We do not invest in first-time funds, but instead focus on those that have delivered strong results consistently—even during periods of economic downturn. Additionally, we always select our funds with the Dutch investor's tax situation in mind, ensuring optimal fiscal efficiency.

Will private markets continue to recover this year? 10 predictions for 2024

morgan@marktlinkcapital.com (Morgan Hielkema | Investment manager) — Tue, 16 Apr 2024 08:05:04 GMT

1. Inflation slows, room for lower interest rates

In 2024, the IMF expects a gradual decline in global inflation, albeit with regional differences. Importantly for investors, central banks are expected to cut policy rates, which will make financing private equity transactions easier.

2. Exit climate recovers slightly

According to Pitchbook, just over 1,000 exits took place in the European private equity landscape in 2023 up until November, more than 30% less than in the same period the previous year. Investment companies that previously had a wait-and-see approach will step up their efforts to achieve exits in 2024, as the end of term for some funds is approaching.

3. Continued growth of continuation vehicles

Continuation vehicles remain popular with investment companies to secure exits. Due to increased supply, there will be a continued flight to quality, with only the most attractive vehicles closing at the desired size.

4. Increase in private equity acquisitions

Private equity acquisitions are expected to increase, partly driven by still relatively abundant capital, which keeps company valuations supported. Investment companies that raised funds before the Covid pandemic remain under pressure to deploy capital towards the end of their investment period, resulting in a significant amount of available capital for 2024 and 2025.

5. Creativity remains crucial for successful dealmaking

Despite expected increased market stability compared to 2023, a creative approach remains key when closing deals. This may result in a higher number of carve-out transactions, where investment companies can often add significant value.

6. Slight recovery of fundraising market

With improving macroeconomic prospects and greater stability in public markets, established investment companies are expected to find more opportunities to raise capital for new funds.

New and relatively young investment companies may also benefit, although investors will continue to assess critically the quality, experience and professionalism of teams.

7. Further democratisation of private markets

Demand from entrepreneurs and private investors for private markets investments will continue to grow in 2024, driven by the need for diversification and higher returns. According to Goldman Sachs, European family offices allocated an average of 30% of their assets to private markets in 2023, with this share expected to increase further.

8. Increased supply of co-investments

Despite slightly improved fundraising conditions, investment companies will continue to offer co-investments to attract investors. Co-investments also enable better diversification with less capital at the fund level.

9. Further growth of the secondaries market

The average discount on secondaries transactions is gradually increasing, driven by investors’ continued willingness to sell fund positions. This is partly due to increased investment pace and resulting capital calls. As a result, the secondaries market is expected to grow further, with 2024 potentially becoming a record year in transaction volume.

10. Expansion of NAV loans

Despite concerns among investors, the NAV loan market is expected to continue expanding, driven by ongoing demand for liquidity.

The rise of private equity secondaries: a market with hidden gems?

morgan@marktlinkcapital.com (Morgan Hielkema | Investment manager) — Tue, 16 Apr 2024 08:04:45 GMT

Over the past few decades, private equity has proven to be one of the best-performing asset classes. Average historical returns are structurally higher than in the stock market and tend to be more stable¹. On the other hand, the category is characterised by: 1) its less liquid nature - it can take longer to sell a private equity fund position early (fund terms typically run for 10 years or longer), and 2) it can take a relatively long time before committed capital is called up ('deployed') and then distributed as returns. Private equity secondaries can provide a solution to this.

1. The secondaries market allows private equity investors to sell fund positions more easily.

Institutional investors often have other reasons for early liquidation. For example, a pension fund has a strategic investment policy that sets ranges for each asset class. These indicate a minimum and maximum percentage of the total portfolio within which these categories can move. As certain investment categories outperform others, and move outside the set ranges, the pension fund will have to 'rebalance'. This means that categories that fall through the lower limit are acquired, and those that move through the upper limit are sold to return to the original ratio. In recent years (especially the 2021-2022 period), private equity has performed relatively well and bonds and listed equities less so. As a result, the proportion of private equity in the overall portfolio has risen sharply. This is also known as the 'denominator effect'. To get back within the range, many pension funds have had to sell their private equity fund positions. As many positions are sold at the same time, buyers can in some cases negotiate significant discounts. Secondaries funds are such buyers of existing positions.

2. For investors in secondaries funds, who buy fund positions, accelerated capital calls and distributions are possible.

This is because the positions that secondaries funds invest in have been part of the underlying fund for some time. As a result, it takes less time for cash flows to start. Secondaries funds additionally offer the opportunity to benefit from:

discounted entry, which in some cases allows secondaries funds to present an already upgraded portfolio during the fundraising period;
diversification benefits - typically a secondaries fund includes many more companies than a regular private equity fund; and
greater transparency as you often have early insight into the companies that make up the portfolio.

About Marktlink Capital

Marktlink Capital has been investing in the secondaries market since its inception in 2020. During that time, we have built a track record of investments in 5 top secondaries funds with EUR 160 million of committed capital.

How secondaries transactions work

The secondaries market is part of the private equity sector. Secondaries funds buy existing positions in private equity funds from investors in those funds. Classic private equity funds are also called primary funds. The manager of a primary fund is also known as the general partner ("GP"). As part of a secondaries transaction, all applicable rights and obligations are transferred from the original LP to the relevant secondaries fund (see chart below). A well-known example of a secondaries transaction is a pension fund selling positions as a result of the denominator effect, providing liquidity to the original LPs (in this example, the pension fund).

Diagram of a secondaries transaction.
Source: Pitchbook (2023). The Evolution of Private Market Secondaries.

Market perspective: the secondaries market is growing

Secondaries have become an increasingly attractive segment of the private equity market as they provide flexibility for LPs looking to liquidate or rebalance their portfolio. The secondaries market is relatively young and has experienced significant growth over the past 15 years. By 2022, the global secondaries market had reached a record size of over USD 400 billion (see chart below). A major reason for the recent growth spurt has been the denominator effect. But also structurally, the need for liquidity from private equity investors continues to grow. This is partly due to the strong growth of private equity over the past decades, of which the secondaries market is a derivative.

Moreover, the share of secondaries within the broader private equity market has increased over that period, but still represents only 8% of the total as of 2022. We believe the secondaries market will continue to grow.

Private equity secondaries assets under management (‘AUM’).
Source: Preqin (2023). Private Equity Q2 2023: Preqin Quarterly Update.

The average annual growth rate of capital raised by secondaries funds has also been high. This has increased the demand for investment opportunities within the secondaries market. Yet supply appears to be (much) higher than current demand².
In recent years, another type of secondaries transaction has emerged and now accounts for a significant portion of the secondaries market. This type is a 'GP-led transaction', where interests in one or more portfolio companies of a GP are transferred to a newly created fund and the original LPs are presented with the option to participate in that new fund or to transfer their interest to new LPs. Since the initiative for this secondary transaction lies with the GP, we refer to this as a GP-led transaction. Such a transaction may be desirable if the GP thinks there is more value in a portfolio company and the previous fund is at the end of its term or has no more capital for new investments. It is also a way of providing liquidity to LPs at a time when an IPO or sale of a company is less obvious.
GP-led transactions have more similarities to primary transactions. For instance, capital usually takes longer to invest, positions stay in the fund for longer and entry is usually made at cost price. For the remainder of this article, we will focus on the 'classic' form of a secondaries transaction as described earlier.

The four advantages of investing in secondaries

A perceptive investor might ask, "how can a fund be upgraded right after entering?" Within secondaries, this is possible. For one thing, a fund may already have made investments that are showing results, while the fundraisinge period for that fund is still ongoing. Another reason is the discount (transaction value below NAV) that secondaries funds can negotiate from sellers of fund positions in some cases. Discounts are often possible within the secondaries market when there is a need for liquidity, for instance due to a need for rebalancing from an institutional investor or bankruptcy of an individual LP. The average discount in secondaries transactions within buy-out private equity was around 10% in the first half of 2023, and 31% in venture capital (see chart below). As a general rule, the more complex a situation is, the fewer bidders and the higher the transaction discount.

Average discounts on LP portfolios (% below NAV).
Source: Jefferies (2023). H1 2023 Global Secondary Market Review.
2. Another advantage of secondaries is that capital, compared to a primary fund, is expected to be called and also distributed to investors relatively quickly. This is because the fund positions these funds invest in have already been part of the underlying fund for some time. This ensures that a secondaries investment is often complementary to other private markets investments. Early distributions can then be linked to the capital calls.
To provide an indication, the dotted line in the chart below shows a combined investment of 50% in a primary fund and 50% in a secondaries fund. It is worth noting that i) the maximum capital drawn down is lower than for a separate investment in either fund, ii) the moment when the initial investment is back with the investor occurs earlier than for a separate investment in the primary fund (the dotted line crosses the horizontal axis earlier), and iii) the expected return is higher than for a separate investment in the secondaries fund.

Indicative cashflow profile of an investment in a secondaries fund versus a primary fund.
Source: Marktlink Capital (2023).

Oliver Gardey, Managing Partner at ICG, a global private markets asset manager, has more than 25 years of experience in the private equity industry, and specifically within secondaries. Gardey points out: 'In our strategy, we focus on the 'sweet spot' of portfolios that are on average around 5-7 years into their maturity. As a rule, after that, the so-called 'harvesting' period begins when, in addition to discount on entry, there is still significant potential for value increase in the portfolio.'

Indicative cashflow profile of a primary fund and a possible moment of entry by a secondaries fund.
Source: ICG (2023). Investor Presentation.
Adding secondaries can also offer diversification benefits. For instance, one of ICG's current transactions is underlyingly invested in 77 companies. This kind of diversification can help reduce risk at the lower end of a broader investment portfolio.
Finally, investors in secondaries have the advantage of partial or full insight into the companies they invest in. 'Blind Pool Risk' refers to the fact that LPs in primary funds commit capital to a portfolio that has yet to be built. This creates a 'blind pool' of capital. In the case of secondaries, especially those purchased later in a fund's term, money is invested in companies that are already well-known. This allows LPs to analyse performance to date and calculate the future value potential of the underlying companies.

Risk and other considerations

Many of the risks that apply to primary funds, apply to secondaries as well. Consider, for instance, the risks of transactions being overvalued before entry, the value of secondaries' positions falling after entry, or a weakening macroeconomic outlook.

Cost is also a consideration with secondaries. Although secondaries funds typically charge a lower management fee than primary funds, fees are still payable to the underlying fund managers with whom trades are made, in addition to the fund manager's own costs.

Conclusion

The secondaries market allows LPs to sell fund positions more easily. For investors in secondaries funds, capital can be quickly put to work and redistributed. Furthermore, the portfolio of a secondaries fund can increase its value early on in some cases, and provides great diversification.

Secondaries, like any other asset class, involve risks and careful consideration. However, within this market, for those who know where to look, there are hidden gems to be found. These offer the advantages as discussed earlier, and are hard to find elsewhere in the spectrum of investment opportunities. With the right fund choice, Marktlink Capital considers secondaries a potentially valuable addition to a private markets portfolio.

Should you be interested in investing in the secondaries market or learning more about the trends and developments, we are at your disposal. We currently have the opportunity to invest in a fund with a secondaries focus. We would be happy to give you more details if required.

Disclaimer

This document is not an offer or solicitation of an offer to acquire a unit in an investment vehicle, to purchase a financial instrument and does not constitute advice on financial instruments.

The information contained in this presentation reflects the prevailing current market and our view of it, which may be subject to change. The information contained in this document has been compiled from sources believed to be reliable without further investigation as to the accuracy of such information. No express or implied warranties or guarantees are given as to the accuracy or completeness of this presentation or its contents. Also, neither this presentation nor anything in it shall create any obligation for Marktlink Capital or be, or intended to be, the basis of any agreement with Marktlink Capital.

Investing in private equity involves risk. Past results do not guarantee future performance.
Marktlink Capital is registered with the Netherlands Authority for the Financial Markets as a 'small manager' in accordance with Article 2:66a of the Financial Supervision Act. Marktlink Capital does not hold a licence as referred to in Section 2:65 of the Financial Supervision Act to manage investment institutions, and as such, Marktlink Capital and its investment institutions are not supervised by the Netherlands Authority for the Financial Markets or De Nederlandsche Bank N.V.

Sources

1) Bron: Bain & Company (2023). Global Private Equity Report 2023
2) Bron: Hamilton Lane (2023). What Does Secondary Market Growth Mean for You?

Portfolio allocation: private equity venture capital

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Tue, 16 Apr 2024 08:04:20 GMT

What proportion of my assets do I invest in private equity and venture capital? And how do these investment categories compare to shares, real estate, bonds or savings? Professional investors allocate 10% to 30% of their assets to investment companies, split into around 70% buyout and growth equity investments and around 30% venture capital. This allocation is far from random. If we look at the science behind portfolio allocation, we see that this distribution may be the most efficient.

Risk and return

It is basically a two-level question. Firstly, we need to know how much in total we want to invest in private markets (the collective name for investment categories such as private equity and venture capital) and secondly, how to allocate between private equity and venture capital within that investment category. As always with investing, this is a trade-off between risk and return. Too much capital in relatively safe categories like savings and real estate may not yield enough returns. However, taking all investments outside the stock market at once, may not be a good idea either.

Diversification is key

In principle, diversification of investments ensures fewer peaks and troughs in the overall value of your investments. This is due to the phenomenon of correlation, which describes the interconnection between investment categories. Not every investment category responds to market conditions in the same way. An umbrella manufacturer benefits from a bad summer, while at the sunscreen factory, they hope for some sunshine: putting together a mix of investments that takes these correlations into account is therefore very important. There are also differences between categories: for example, rising interest rates are good for savings but bad for property prices.

Efficient frontier

So, as an investor, you look for the optimal investment mix between different asset classes. For example, one investment mix leads to a high risk with a low return, while another mix can end up with a higher return against the same risk. An optimal investment mix maximizes returns at the lowest possible risk. Such an investment portfolio is called 'efficient' and therefore offers the best risk-return profile. Different efficient portfolio types are possible. Depending on an investor's return target and risk appetite, the optimal mix between private equity and venture capital differs for each investor's investment portfolio. Private equity and venture capital both enhance the investment portfolio in terms of diversification and can have a positive impact on the risk-return profile. The private equity and venture capital portfolio of more experienced private market investors, such as family offices, accounts for between 10% and 30% of their assets^[1]. Within this category, a split of around 70% in buyout and growth equity (private equity) and around 30% venture capital is often applied.*

^[1] Cambridge Associates Global Private Equity and Venture Capital Benchmark, 2020

How do private equity parties work?

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Tue, 16 Apr 2024 08:03:36 GMT

Most companies in the Netherlands are owned by entrepreneurs, a small proportion are owned by the public - the stock market - and a growing number of companies are owned by private equity firms. This piques the interest of investors, but what exactly do private equity firms do?

Setting up funds

As a rule, private equity houses set up a fund by raising money from large investors, such as pension funds and wealthy families. Then, they take this 'bag of money' to the market to take stakes in companies. The funds have a certain duration. At the end of the term, the companies are sold and the fund pays out the proceeds of the fund in proportion to the investment. 

What is important to note, is that the task of PE funds is not focused solely on realising profits from their portfolio companies. Obviously, it is important that the companies in the funds are profitable and if so, the profits naturally flow to the funds - they are shareholders, after all - but the underlying value of the companies is perhaps even more important. After all, the interests are only held for the duration of the fund and then sold: the difference between the purchase and sale price of the company is a way of creating value for the investors.

Adding value

Value can be added to a business in many ways. The simplest way is to grow the company naturally by improving its processes, for instance by automating processes or increasing sales and marketing. The second way is by growing the business by linking it with other similar or complementary businesses: this process is known as 'buy-and-build'. Finally, a private equity firm can often raise debt to acquire and grow the company - this is called leverage.

The people managing the fund usually make their money in two ways. Firstly, a percentage of the initial deposit goes to the partnership, as a kind of administrative fee. Secondly, the fund keeps a share of the profits made over the life of the fund. Through this 'performance bonus', the fund also benefits from the fact that the investments make money. Traditionally, these rewards have been 2% of the initial amount and 20% of the realised profit - we therefore refer to this as the 'two and twenty' model. 

Private equity funds come in all shapes and sizes. From small funds that focus very specifically on SMEs (often in a specific sector) to large generalists managing billion-dollar funds and scouring the globe for suitable companies. No two funds are the same. And picking the right funds, especially with the number of private equity funds growing significantly, requires expertise. 

Over the past decades, private equity has proven itself as an investment category. So far, however, it has not been easy to participate as an individual investor. But Marktlink Capital's funds-of-funds now make private equity accessible. Read more about how private equity works. Venture capital is a subcategory of private equity. Find out what venture capital entails and read here what the main differences are between private equity and venture capital.

What is venture capital?

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Tue, 16 Apr 2024 08:03:19 GMT

Social media, ChatGTP and cultured meat: we live in times of unprecedented innovation. The silent engine behind all these developments is venture capital. These funds provide capital to start-ups developing innovative technology. With this growth capital, good ideas grow into mature companies that make handsome returns in fast-growing markets.

Venture funds operate by raising money from investors, such as governments, pension funds and wealthy families, and using it to set up funds. Each fund then invests in a basket of startups. The end goal? Getting back a multiple of the investment when the company is sold. Funds achieve this by maturing the companies and selling them to a PE investor, another existing strategic company or, in some exceptional cases, preparing them for an IPO. 

The venture landscape is wide and deep. From the big funds such as Sequoia and Accel, that invest hundreds of millions in companies like Uber and Facebook to build big monopolies, to university funds that transfer a few thousand euros to a few smart students with a clever idea - there is a fund for every level. Venture funds also tend to specialise in a particular sector, such as biotech or software.

Often, a company goes through several rounds of venture capital as it grows. The names vary (pre-seed, Series A, Series B) but you can assume that as the letters or numbers get higher the amounts increase and the company keeps growing. Some funds specialise in the 'early stage' phase in particular, whereas others step in just before the IPO. In venture capital, you will actually often see multiple funds participating in a single startup to spread the risk. 

What venture capital funds also do is support the management or founders of the company. The founders of innovative companies are often techies or scientists who, while very good at inventing new things, are not always that good at the operational aspect of the business. The funds help find management and work with formal and informal mentors - often former entrepreneurs themselves - to coach the founders.

Venture capital is very different from traditional investing, given the experimental nature of the investments. VC investors take into account that most of their investments will break even and some will not make it, but a few big outliers in their portfolios will yield more than enough to make up for the rest. And that works. Because of these outlier returns and the overall growth of the tech market, venture capital has been the most profitable investment category over the past 20 years.

Over the past decades, venture capital has shown handsome returns. However, it was never possible to participate as a private investor. But Marktlink came up with a solution: Marktlink Capital. As an investment category, venture capital is akin to private equity. The difference between private equity and venture capital is explained here. 

Constantijn van Oranje (Techleap): Startups in the Netherlands need more opportunities to grow

bouke@marktlinkcapital.com (Bouke Marsman | Managing Partner) — Tue, 16 Apr 2024 07:58:30 GMT

The Netherlands is among the top European countries in entrepreneurship and in the number of startups per capita, Techleap.nl concludes. But only a small proportion of these, unlike startups abroad, manage to grow successfully. And it’s precisely those successful scale-ups that are important for economic growth and the ability to provide our own solutions to major societal challenges. "What’s lacking is ambition and urgency in the Netherlands", states Constantijn van Oranje-Nassau (Special Envoy at TechLeap) in conversation with Bouke Marsman, Managing Partner of Marktlink Capital. "If we invest more in the Dutch startup ecosystem, it could generate up to an additional €400 billion for the Dutch treasury."

Techleap is a non-profit organisation dedicated to developing and accelerating a healthy startup and scale-up ecosystem in the Netherlands. Techleap helps Dutch technology companies with a tech community providing knowledge, content and valuable connections. The Netherlands has more than ten thousand startups.

Bouke: Constantijn, since 2016 you have been the standard bearer of Techleap, formerly Startup Delta. It acts as a centre of expertise and contributes with its programmes to help startups and scale-ups gain faster access to knowledge, capital and connections. What have you achieved in recent years?

Constantijn: "When we started, one of our goals was to make the Netherlands the strongest ecosystem for young companies in Europe. We succeeded in doing that. The biggest gap we closed was capital. There is now much more venture capital available in the Netherlands. In 2019, Dutch tech startups raised about €750 million in venture capital; by 2021, that figure had grown to €5.6 billion. This is a great development, to which we have contributed by connecting startups with investors faster."

The Netherlands has relatively many startups. Why do we have proportionally fewer scale-ups compared to other countries?

"This is quite simple: Dutch startups do not raise enough capital; too little is invested in the scale-up phase. As a result, most startups do not get the chance to scale up. In many other countries, there is more ambition: scale up, conquer markets and internationalise. In the Netherlands, we tend to think too small and focus on break-even as a goal in itself. That makes startups less attractive for investors. In the United States, angel investors are much more common. That is not yet fully part of the Dutch ecosystem. Another bottleneck is attracting talent. Especially for startups, which often cannot offer top salaries, attracting the right talent remains a challenge."

Why is it so important to invest in startups?

"Startups are essential for solving major societal challenges, such as healthcare, climate and energy. The Dutch startup ecosystem has enormous growth potential. If we invest more now, as outlined in our State of Dutch Tech 2023 report, this could generate €250 to €400 billion for the Dutch treasury by 2030 and create between 165,000 and 250,000 additional jobs. This is supported by research conducted together with McKinsey. It also reduces dependence on foreign companies, data and services."

Until recently, investing in companies through private equity or venture capital was virtually impossible for private investors. Marktlink Capital now provides access to these funds. What are your thoughts?

"I think this is a very positive development. It allows more investors and entrepreneurs to contribute to the Dutch startup ecosystem. In addition to capital, experienced entrepreneurs can contribute knowledge and expertise, so-called smart capital. That can give companies a competitive advantage. At the same time, investors should be well informed. Risk and return must always be balanced. Choosing a well-diversified fund, such as those offered by Marktlink Capital, is important."

Techleap’s mandate has been extended by three years. What are the plans for this next phase?

"Over the past year, we have focused on building a strong community of leading tech founders through the Bold programme. We want to continue doing that. While our ecosystem is among the strongest in Europe, it still does not compare to Silicon Valley, London or Boston. There is room for further professionalisation. We need to create an environment where companies can attract capital and talent, grow quickly and internationalise. The Dutch Growth Fund, with €20 billion available between 2021 and 2025, is a good start, but not sufficient. We need more effective policies, stronger ambition and a greater focus on high-potential companies."

What are your personal ambitions with Techleap?

"The Dutch startup ecosystem has enormous untapped potential. Startups are the drivers of innovation. My ambition is to help create the right conditions for fast growth, especially in attracting talent and increasing the availability of capital."

Finally, what advice would you give startups that want to raise more capital?

"If you have the ambition to grow fast and internationalise, choose an investor that matches that ambition. Venture capital can help you professionalise and push beyond your comfort zone. With venture capital, founders often retain significant control. The choices you make today will determine your opportunities tomorrow."

*This is based on research (Building a world-class Dutch start-up ecosystem) conducted together with McKinsey.

Investing in private equity during a recession

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Tue, 16 Apr 2024 07:58:06 GMT

Private equity has experienced strong growth in the past decades, with a record amount of capital raised and, on average, high returns. Meanwhile, the current economic climate has become a lot more uncertain and there is even talk of a recession. For many investors, an entirely justified question arises: how do private equity funds perform in times of economic crisis?

Private equity outperforms the stock market

In the past few years, this question has come up frequently in various studies drawing comparisons with the stock market. Since its great rise in the 1980s, the sector has faced a number of crises, and several things stand out:

During previous crises, private equity as an investment class has historically outperformed the stock markets. In the period from 2000 to 2016, it achieved a higher annual average of 4.4% compared to the stock market. This contrast tends to increase during economic downturns. Several data providers show that the best returns are achieved by vintage1 funds from the year following the Dotcom crash (2001) and the financial crisis (2008 to 2009).

Private equity investments are less sensitive to value fluctuations and have lower volatility during a crisis. Research by Hamilton Lane and J.P. Morgan compares the losses in private equity to the Russell 3000 index during the period 1980 to 2014. This showed that 40% of publicly registered shares in the United States experienced a catastrophic loss of more than 70% compared to the peak value. By comparison, less than three in a hundred private equity funds suffered similar losses during this same period.

Recent research by Neuberger Berman shows that private equity investments recover from a financial crisis quicker, as illustrated in the graph below.

What are the reasons why private equity endures recessions relatively well?

Active management and hands-on approach: PE funds are actively involved in the management of their portfolio companies. Established funds often have dedicated value creation teams. Portfolio companies are supported in improving operational processes, receiving strategic advice or renegotiating loans during economic decline. Research by McKinsey shows that funds focusing on active management have performed relatively well during recent crises.
Better access to capital and flexibility: Research shows that private equity portfolio companies have better access to capital and greater flexibility in allocating financial resources. This is often a decisive factor. The probability of a catastrophic loss of more than 70% is about twice as low for a company backed by a PE fund compared to a listed company. In addition, PE-backed companies were better able to increase growth investments during the financial crisis.
Liquidity and long-term perspective: Private equity investments are not easily tradable and are inherently long-term. This prevents investors from selling in panic during downturns. While this may seem like a disadvantage, it actually helps investors maintain a long-term perspective and avoid short-term decisions driven by market volatility.

Why is investing in private equity interesting?

constanteyn@marktlinkcapital.com (Constanteyn Roelofs) — Tue, 16 Apr 2024 07:57:50 GMT

The volume of private equity investments has been growing for years [1]. Because of the high and stable expected returns, investors are allocating an increasing proportion of their investment portfolios to private equity. By adding private equity, the risk profile of the complete investment portfolio will improve because the invested capital is better distributed.

But what factors determine these stable and high returns? Why has private equity been outperforming the stock market by an average 15% for more than 20 years? Several factors are involved:

Private equity portfolio companies get more room to focus on their medium to long-term strategy because the point of private equity funds is to invest with a long-term horizon. This provides room to implement significant strategic and operational changes. Because of this, value creation is less driven by sentiment when compared to the stock market, where listed companies are often more focused on the next quarterly figures.
Very strict selection of private companies in attractive markets. Before a private equity fund invests, an extensive market analysis, selection and due diligence process take place. Often, hundreds of companies are screened, to invest in only 2 or 3 companies per year.
Active share ownership. Private equity firms work together with the management of portfolio companies they invest in, based on active share ownership, to create long-term value. After investing, these fund managers actively deploy their capital, network, knowledge and entrepreneurial experience to help the portfolio company grow.
Deeper market with significantly more private versus listed medium-sized companies. There is simply more choice.

Growing Appeal of Private Equity

Besides attractive returns, flexibility and improvements in the risk profile also play a part in the growth of private equity as an investment class. Not only institutional investors, but family offices are also increasingly active in private equity and invest an average of 22% of their capital available for investment in this category [2]. Portfolio diversification and distribution across different assets are important in order to be less dependent on market fluctuations.

Tradability

An often-heard disadvantage of investing in private equity funds, compared to the stock market, is the tradability. Contrary to listed shares and bonds, investments in private equity are not easily traded on the open market. That is why it is important to achieve a good distribution across different investment categories. In addition, returns vary considerably from one private equity fund to another. Returns heavily depend on the quality of the fund manager. Not only diversification, but also thorough research into funds contributes to high returns.

[1] Statista Research. Europese Private Equity market.
[2] UBS Global Family Office Report 2022