EQUIAM has launched two prior funds: the Private Tech30 Fund (Fund I) and the Private Alpha Fund (Fund II).
EQUIAM has so far delivered top quartile results with Fund I recording a Total Value to Paid In (TVPI) ratio of 2.58x and Distributed to Paid In (DPI) ratio of 1.32x, ranking it in the top 5%, of 2019 vintage VC funds (per Cambridge Associates). Fund II, which is still in its deployment phase (75%+ deployed), has generated positive mark-to-market gains on 75% of the positions as of Q3 2021.
In addition, EQUIAM has a proven track record sourcing both the requisite data and shares in the targeted companies. Over the past 3 years we’ve invested in over 60 private companies and have had more than 20 successful exits. Furthermore, our models and strategy have been backtested to 2005 with results showing a consistent outperformance of top quartile VC managers with less volatility and less correlation to public markets.
Ziad Makkawi is the Founder & CEO of EQUIAM and chairs its Investment Committee. Ziad has 30+ years of investment experience in VC, PE, and global capital markets. He built and ran several multi-billion $ AUM firms, and served as Founder, CEO, and CIO of multiple financial institutions.
John Zic, Partner & Founding Team Member, is a trained data scientist with extensive experience in the VC-backed secondary markets. He is the lead architect of EQUIAM’s GENIUS model and is principally responsible for day-to-day execution of our investment strategy.
Arin Nazarian has over a decade of principal investment experience across the Private Equity and Venture Capital industries. Arin currently shares responsibility for the execution of the investment strategy and ongoing optimization of the EQUIAM GENIUS model. Arin’s day-to-day duties also include identifying the top companies for EQUIAM to invest in and building relationships with brokers and companies to acquire positions for the portfolio.
Laxus Tat has extensive experience investing within multi-billion AUM quantitative asset management strategies. At EQUIAM, he has been integral in producing and applying quantitative research to drive core investment decisions, construct new signals, and improve the underlying logic and structure of the GENIUS model.
The above individuals constitute the firm’s Investment Committee which is the main decision-making body for all investment related matters including the GENIUS model and its optimization.
Please review Team section of equiam.com for more details on the above and the rest of the EQUIAM Team.
Outside Counsel: Dechert LLP (for U.S. matters); Ogier (for Cayman matters), Tannenbaum Helpern Syracuse & Hirschtritt LLP
Fund Administrator: Maples
Fund Auditor: KPMG
Fund Tax Advisor: Cohn Reznick
Please note that EQUIAM does not provide legal counsel or tax planning to investors. All parties are responsible for making sure they understand the benefits and risks of this asset class and any associated transaction.
EQUIAM has created a proprietary, data-driven investment model known internally as the GENIUS Investment Model (GENIUS is an acronym for Generating Exceptionally Novel Insight Using Systemization). The GENIUS Model analyzes a universe of 120,000+ private companies and over 10 million data points to shortlist the investable universe. We filter tens of thousands of companies using dozens of metrics and signals to rank and score the private VC-backed universe on both an absolute and relative basis.
The model is continuously updated with new data and signals and re-ran monthly. EQUIAM only invests in the top 30 ranked companies (99.5th percentile of our investable universe) at the time of investment. We construct and offer investors a diversified portfolio of the companies reshaping the world. We are sector and structure agnostic and apply data-science to a space that is otherwise dominated by emotions, rumors, and opinions.
EQUIAM sources its deals through a multi-pronged approach. We have a strategic partnership with the largest direct secondary broker: Forge Global. In addition, we work closely with nearly a dozen other private secondary brokers in the US & Canada. Brokered transactions reflect roughly 65% of all trades. Our sourcing strategy increasingly includes Direct-to-Issuer transactions for both Primary and Secondary. In addition, EQUIAM has prioritized relationship building with early-stage VCs looking for liquidity within their portfolios.
EQUIAM Funds are comprised of 30-40 individual investments providing increased diversification and a broader portfolio than a traditional VC firm.
Our systematic, data-powered approach allows us to analyze over 10x the number of companies per year that a traditional VC firm does. We do this continuously and can more nimbly enter and exit holdings.
EQUIAM is able to deploy capital 3x times faster than traditional VCs and mitigate the standard J-Curve of private investing. In addition, the growth and late-stage focus of the fund means we can offer investors much faster liquidity and, return capital back to investors starting at the end of the second year. Our funds typically have 4-year terms (+1+1 extensions if required) which is roughly half the fund life of a typical VC fund.
Lastly, EQUIAM implements best-in-class portfolio management by actively monitoring secondary market dynamics. If a company’s prospects deteriorates or stalls, EQUIAM may look to tactically exit via the private secondary market, mitigating downside risk and protecting the original principal.
The target universe for Fund III is growth and late-stage venture backed companies with a minimum valuation of $250M, Series B+ raised capital, and rank within the top 30 of the GENIUS model at the time of investment.
Although EQUIAM’s Fund III will principally be invested in US companies (min. 85%), we do have discretion to deploy up to 15%of committed capital outside of the US.
EQUIAM employs a rigorous screening process and looks for companies that are in the 99.5th+ percentile on a variety of signals including company/sector health, valuation, revenue growth, hiring health, traction, pricing, and momentum. The prototypical investment has a well-capitalized balance sheet, is growing revenue is excess of 50% annually, is positioned in a high-growth sector, has a strong management team, and is priced attractively.
Qualified Purchasers who meet suitability and compliance standards are eligible to invest.
The current requirements are detailed below:
Certainly, as long as the required compliance checks are completed (accreditation, background and ID checks for regulation, Anti-Money Laundering, and Office of Foreign Assets Control list, etc.), from a U.S. perspective, you are eligible to invest. These are required for all investors, whether domestic or international.
The fund has been structurally established as a Delaware Master fund with a Cayman-based feeder fund for International and U.S. tax-exempt investors and a Delaware feeder fund for U.S. investors.
Yes. We’ve partnered with AltoIRA to enable seamless investment into EQUIAM funds. Alto is an IRA platform that helps you create Traditional, Roth or SEP IRAs specifically designed for investing in alternative assets. Alto will help you create a brand new Alternative IRA, and fund it using retirement dollars from an existing IRA/401(k) or via annual cash contribution.
If you have your own IRA partner, we can look at integrating them into our process.
The Fund is intended to provide investors with access to private growth and late-stage companies; however, if a position is held through IPO, EQUIAM will be subject to the standard lock-up provision, typically 180 days. EQUIAM will typically exit publicly held positions within 6 - 12 months of lock-up expiration.
The fund is a closed-end fund and hence, investors should expect to remain invested in the fund for the duration of that period. During the first 2 (two) years following final closing, the Fund intends to reinvest all exit proceeds back into the strategy. Following the reinvestment period, the exit proceeds will be delivered pro-rata to the investors in the fund. The primary ways a portfolio company will be exited are (1) IPO, (2) Acquisition, or (3) a strategic exit via the private secondary market.
The typical deal size is a function of the overall fund size. With a $200M target fund & 30+ positions, the typical deal size will be $5 - 7 million per company.
EQUIAM’s unique edge is its proactive approach to portfolio construction. We never wait for deals to come to us. At any point in time, we know our exact top 30 target portfolio and are actively looking to acquire the necessary positions. Our historical deployment rate has been 2-6 deals per month. We have a hit rate of 90% i.e. buying companies from Top 30 and 100% from Top 40 for our Fund II deployment.
Please see the portfolio section of our website for more details on our holdings.
It is our intention to seek out co-investment opportunities for our investors as both the primary and secondary markets are growing exponentially. In situations where offered supply exceeds the Fund’s appetite, we will seek to offer this excess to LP’s that have expressed an interest in participating in our co-investment program. In these cases, we will structure dedicated SPVs for this purpose.