Is the pioneer of private equity’s hottest trade learning to let go?
At 67, Jeremy Coller is showing signs of slowly opening up to limited outside influence
AFTER tossing a toy spider into the crowd at a recent New York event, Jeremy Coller explained the real meaning behind survival of the fittest.
The 67-year-old finance maverick had just hosted a party for his investors at the city’s American Museum of Natural History. Spending the evening among the wonders of the natural world had given him pause for thought.
“Charles Darwin taught us that it’s not the strongest of the species that survives, nor the biggest, nor the fastest – but it’s the one most capable to be adaptable to change,” Coller said in a video recording of the investor meeting last month, obtained by Bloomberg News.
The question now is whether a billionaire accustomed to calling the shots for more than three decades at his eponymous firm, Coller Capital, a pioneer in the market for private-equity secondaries, can practise what he preaches.
Days before the speech, US$5 trillion investing giant State Street’s asset management arm announced it had bought a minority stake in Coller. Details – including the size of the investment and price paid – were scarce, but it offered a clue that deeper change is afoot inside the London-based firm.
Since starting out 35 years ago in secondaries – a once-peripheral strategy of helping investors exit unwanted stakes in private-equity funds – Coller has seen the industry evolve from one where sceptics questioned whether anyone should be “buying other people’s trash”.
He has helped drag the strategy closer to the investing mainstream and become fabulously rich. Now, he’s working on what may be the toughest transformation yet: loosening his grip on his own firm.
Unlike some rival secondaries platforms, Coller bears the stamp of its founder so thoroughly that it’s hard to separate the man from the firm, people who have worked there say.
Passionate about animal rights, he won’t allow meat to be served in its canteen or at events. Meeting rooms at its London headquarters are named after his favourite inventors, such as Martha Jane Coston, an American who came up with a method for signalling with flares at sea.
Even if fundraising has lagged standout peers recently, he and his firm are well suited for this moment. Since interest rates surged in 2022, many buyout fund managers have struggled to sell the companies they own amid a volatile deals market. For outside investors, known as the limited partners, that can be a problem as they may need to take cash out before a fund matures.
Coller saw an opportunity early on to offer investors an exit option through buying their fund holdings. Today, it’s a booming market: Secondary sales are set to hit US$210 billion of deal flow this year, a more than tripling in just five years, according to PJT Partners, a leading industry adviser.
As one of the largest independent platforms for secondaries globally, Coller Capital could be valued at as much as US$3.5 billion, a person with knowledge of the matter said, setting up its founder – who still owns a majority of the business – for a massive potential payday down the line.
Already, he enjoys many of the trappings of success on offer to the ultra-rich, from luxury homes in London and Tel Aviv to a passion for philanthropic largesse.
He has donated millions to higher-education and now has two university schools named after him, including the Jeremy Coller Centre for Animal Sentience at the London School of Economics.
He entertains friends and family at Arsenal FC’s stadium in the UK capital, where he owns 34 seat debentures – despite initially not even supporting the soccer team.
But his path to the top of the industry was far from straightforward. Legal documents involving a tax dispute with the UK authorities show how he, like the market that made his fortune, was overlooked at several points in his life.
He was brought up in an affluent part of North London as the son of a small business owner after his grandfather, Josef Koller, and father fled from Austria to escape Nazi persecution in 1938. As his father’s business expanded over time, the Collers took on a comfortable post-war existence, including summer holidays in Juan-les-Pins on the French Riviera and skiing in Switzerland.
That all came crashing down when his father died suddenly when he was just 10, according to the documents. His mother fell into depression and Coller was shipped off to boarding school.
He was forced to take his final school exams three times before university.
Early forays into the workforce also proved challenging. In his first year of work, Coller went through three jobs, the documents showed. Having been promoted to head of research at Fidelity International, he was terminated after just six months.
But after joining what was then Imperial Chemical Industries’ pension fund, he found his footing, developing expertise in buyout and venture financing. The fund became the first institutional investor in Venture Capital Fund of America’s secondaries fund, which is widely considered the first ever.
At 32, he then established what would later become Coller Capital with a senior executive at VCFA, Arnaud Isnard. Baring Brothers seeded the fledgling firm with £100,000 (S$172,570) of capital on the condition he would return £60,000 if it failed. Coller sold his flat to help back the new venture.
Coller Capital quickly established itself as a buccaneering investor, able to pioneer different ways of secondaries investing. It bought a private equity portfolio off US-based Shell Pension Trust and 41 private equity fund stakes from Abbey National, each considered the largest secondaries deal of its time.
In 1996, it completed the first general partner-led transaction for Arrow Capital, an area of the market that is becoming increasingly significant.
“These investments are changing private equity as a whole, by shifting how managers can retain control of their best assets and offer better terms to investors” said Nils Rode, chief investment officer at Schroders Capital, referring to general partner-led transactions. “We think this segment of the market is going to grow dramatically.”
The secondaries industry has since skyrocketed into a market with about US$650 billion of assets under management, Goldman Sachs strategists estimate.
Since its founding, Coller has invested over US$51 billion of capital in secondaries. But over the past few years, the firm has lost some ground to old rivals in the battle for investor interest.
This year, Ardian amassed US$30 billion for its ninth secondaries fund, while another old competitor, Lexington Partners, built a US$22.7 billion pool of capital for its 10th fund in 2024.
Meanwhile, Coller is on its ninth and expected to raise about US$12 billion, people with knowledge of the matter said. It has also taken longer to close than the firm expected, according to legal filings.
As the market matures, investors are starting to reward firms that have built out more dedicated internal infrastructure, including on succession planning, according to people with knowledge of the matter.
“The largest established players have scaled at a faster pace,” said Scott Beckelman, global co-head of secondary advisory at Jefferies. “Differentiation is critical, and since most LPs (limited partnerships) allocate to only a handful of secondaries funds, they tend to prioritise scale and experienced teams.”
Coller has tried to pass the reins over. About a decade ago, he appointed Tim Jones as chief executive officer, but found it difficult to pull back, people who worked at the firm at the time said.
Jones left not long after his elevation, and Coller hasn’t appointed another CEO since. In the meantime, other executives have left and now occupy senior roles at competitors such as Pantheon, CVC Capital Partners and Ares Management.
Separately, in an ongoing court case brought by Christopher McDermott-Spencer, the firm’s former head of markets and planning, Coller is accused of unjustly withholding carried interest, a form of pay for dealmakers.
According to court documents, McDermott-Spencer alleged that an “inconsistent approach and personal biases to reward, remuneration and carried interest” were “the cause of much unrest in Coller over the years, especially among the Partners and the investment team”.
Lawyers for Coller and his firm have argued that the case is without merit and is being vigorously defended. The award of carry is subject to a formal process and is reviewed and approved by the Board, they said.
Opening up
Amid the challenges, Coller is showing signs of slowly opening up to limited outside influence. The firm took on US investor Hunter Point Capital, co-founded by former Blackstone executive Bennett Goodman, as a strategic minority investor in 2023.
It now has to engage with a US behemoth carrying even more weight in the form of State Street.
“Our coming into the firm is one more step to creating an institutional ownership structure,” Yie-Hsin Hung, State Street Investment Management’s chief executive officer, said in an interview. “You have a lot of firms across private markets where the founders are still in charge.”
Meanwhile, Coller has launched private wealth and credit secondaries strategies, amassing US$5 billion and US$6.8 billion, respectively. It also has an independent board, chaired by former chief executive of 3i Group, Michael Queen. Hung will join next year.
Bennett Goodman said in an interview that Coller’s recent strategic moves show where the secondaries market is headed.
“Broadening their geographic reach, launching new products, developing a retail distribution capability – they’re being very thoughtful about institutionalising the platform,” he said.
Such a Darwinian transformation is a big departure for Coller, who still drives a beaten-up Toyota Prius that he bought second hand. He previously said he chose the name of the firm to make it harder for people to oust him. But he’s never been short of ideas.
About a decade ago, he stared at his own mortality when a friend wrote two mock obituaries of him, inspired by dynamite inventor Alfred Nobel who started the Peace Prize after reading his own prematurely released obituary and was reportedly horrified at the focus on his destructive invention.
In the first of Coller’s mock obituaries, he died that very year, commemorated as the godfather of private-equity secondaries, but also seen as a bit of a bore. In the second, he lived until 98, devoting the rest of his life to achieving things outside the industry.
“The shock treatment of the second obituary was to use the additional 44 years for crazy, shoot-for-the-moon projections of what I might achieve by 98,” Coller noted, in an essay published by the Milken Institute.
“A meaningful life is an authentic life and mine is a work in progress, so I need to live!” BLOOMBERG
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