Read the full interview here (excerpt below): https://www.realisticoptimist.io/nodem-liquidity-for-emerging-market-vcs/

Biography

Alex Branton is the founder of Nodem, a new fund freeing up liquidity for LPs and GPs investing in emerging markets.

Prior to Nodem, Alex was a partner at Sturgeon Capital and previously an investor at Cambridge Associates.

What problem is Nodem solving?

For the past decade, VCs in emerging markets (EMs) have enjoyed a sharp increase in LP funding, culminating in a 2021 peak. While billions in value have been created, liquidity has been hard to come by. 

Many funds are nearing the end of their fund life and need to return capital to their LPs. Unfortunately, many of the companies they’ve invested in haven’t been acquired or gone public just yet. This creates a structural blockage, a clog, which hampers the flow of new money into the asset class. 

This creates a conundrum. Maturing funds need to return capital to LPs, but GPs want to avoid accepting sharp discounts for their fast-growing winners just for the sake of liquidity.

Further, whilst LPs need liquidity to re-up, they want to maintain exposure to the fund's performing companies.

The whole situation isn’t abnormal, per se. EM or not, there is a significant mismatch in the arbitrary length of VC funds (10 years) and the practical reality of how long outlier businesses take to exit (more than 10 years). 

EM VCs face a problem that VCs in developed markets (DMs) have already faced. However, EM VCs don’t have access to the liquidity solutions DM VCs have access to.

Hence Nodem.