NEA quietly reenters the secondaries market

New Enterprise Associates (NEA) is getting back into the secondaries game.

The Silicon Valley-based VC raised more than $468 million for NEA Secondary Opportunity Fund, according to an SEC filing. The fundraise closed on July 3, according to a source familiar with the matter, but hasn't received much attention. The fund raised capital from more than 60 limited partners, including the San Francisco Employees' Retirement System, which committed $20 million to the fund, according to meeting documents.

NEA did not respond to a request for comment.

This is not NEA's first foray into the secondaries market, an asset class that involves buying existing stakes in a company or another fund. The firm used to be a secondaries player before spinning out its secondaries practice in 2018 because it wasn't a registered investment adviser, meaning no more than 20% of its assets could be held on the secondary market. That spinout became NewView Capital, which is still helmed by Ravi Viswanathan, an NEA investor for nearly 15 years before launching NewView.

NEA became a registered investment adviser in 2023, a source familiar with the matter told TechCrunch, and thus NEA could reenter the secondaries market with an in-house fund.

It's a good time to have capital to invest in the secondaries market. Recent data from secondary data tracking platform Caplight records more than $706 million being invested into direct secondaries deals — or transactions involving a company stake — in the first half of 2024. That puts this year on track to surpass last year's $1.1 billion trading volume total.

Part of those deals are happening the traditional way, with investors buying previous owners’ shares with the consent of the company. Other investors are raising special purpose vehicles (SPVs), or vehicles raised to back a specific asset, to gain access to secondaries deals of hot companies. In rarer cases, some investors are even buying into other firms' SPVs to get a piece of the action.

NEA is not the only firm raising a fund dedicated to the buying of secondary shares right now. A few months ago, StepStone raised $3.3 billion for the largest dedicated venture secondaries fund of all time. Earlier this week, G Squared raised $1.1 billion for a late-stage fund with plans to put the majority of the capital toward secondary transactions. Last fall, Industry Ventures raised $1.45 billion for the strategy.