Continuation-Fund: Targeted continuing development through extend
In certain situations, the growth phase of a company planned by management and capiton may be extended beyond the regular term of the respective capiton fund. To exploit the total development potential in conjunction with the management, and so as not to have to sell the portfolio company at the end of the regular fund term, the stake in the respective company can be maintained by means of a specially established ‚continuation-fund‘.
Fresh growth capital and (partial) returns for existing investors
To set up the continuation-fund and collect fresh growth capital for the portfolio company, capiton usually conducts a competitive auction process within the framework of what is called a GP-led secondary transaction. The transaction allows the existing investors to either (wholly or partially) sell their shares at a fair market price determined by the auction, or to roll them over into the new continuation-fund and thus continue to participate in the expected increase in value.
The interests sold by the existing investors can be purchased by new capiton investors, who are also investing in the company via a fund established by capiton, at the defined fair market price. Both existing and new investors also make additional capital available via the capiton funds to finance the planned growth of the company.
capiton continues to provide advice and support to the company and its management in the new fund structure as a financial sparring partner, and as general partner manages the continuation-fund specially set up for the company.