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Alumni Spotlight: A.J. Patel (MFin'16)


The private equity secondaries market has experienced rapid growth in recent years, as institutional investors have taken an increasingly active approach to managing their portfolios. Secondaries are the only way to limited partners to exit early from their private equity investments. The secondaries market provides liquidity to private equity investors, allowing them to sell positions in private equity funds and liquidate equity stakes in private companies (the latter known as "directs" or "synthetics"). The market's growth is therefore a natural consequence of today's large pool of outstanding private equity commitments.

On this week's #SpotlightSaturday, we feature former QUAAF Chief Operating Officer, MFIN graduate, and class president, Amjad (A.J.) Patel. During his time, QUAAF offered A.J. direct access into hedge fund investing, paving his way to a career in secondaries advisory for alternative assets. A.J. was also responsible for setting up the initial link between Canada and Beijing, leading to what is now our Beijing office with the Renmin-Queen's MFin program. Read more about his time at QUAAF and the skillset he brought into the workforce!

Can you tell us about your background prior to coming into the MFIN Program at Queen’s University and why you decided to join QUAAF?

I had no exposure to hedge funds/alternative investments coming into the MFIN program. One thing I could ensure was to be as active and open as possible in order to learn new things, and also willing to get involved in as many initiatives as possible which eventually led me to QUAAF. I later became part of the QUAAF leadership team as well as representing the Smith School of Business in the annual CFA Challenge Program.

My experience with QUAAF was super interesting because it opened my eyes to hedge funds investing approaches in a global context versus the traditional asset class of fixed income and equity that I knew of. I had the opportunity of experiencing how managing real funds in a hedge fund was like and that really helped me in my future career decisions to ultimately get into alternative assets after graduation.

Why did you decide to go into Secondaries?

I did not really know much about the secondaries market prior to joining Setter Capital, but I found it as an interesting business model and an industry to be working in, given its high growth potential as a sector although it still remains small size of the alternative asset industry as a whole. We’ve seen double-digit growth in the secondary market globally in recent times with 2015 year-over-year growth of about 30%.

Total secondaries transactions also stood at about USD 50 billion in 2017, USD 70 billion in 2018 and was projected to hit about USD 90 billion in 2019. As a business, we typically serve as secondary market for alternative assets (i.e. private equity, real estate, and hedge funds) versus the traditional fixed income/equity asset classes and we serve as brokers between investors and private equity funds hoping to buy and sell investments.

Joining QUAAF gave me direct access and exposure to the alternative asset market and this gave me a competitive advantage over my peers when I went for my job interview at my current firm. I was more able to speak the right hedge fund language at the interview. Also, I found out later that students from other MBA/MFIN programs didn’t really have a deeper understanding of the hedge funds industry.

Joining QUAAF gave me direct access and exposure to the alternative assets market and this gave me a competitive advantage over my peers when I went for my job interview at my current firm.

How is the growing market for secondaries transactions impacting valuations?

Currently, secondaries market funds are highly sought-after in nature and this is really putting an upside pressure on the pricing of these alternative assets within the secondary markets. Historically, global private equity funds such as the KKR Funds, have been the major target for funding most primary market transactions within the alternative asset industry. But because these funds are hard to access, many of these investors who seek liquidity from large global private equity funds are actually accessing these funds through the secondaries market where we come into the picture by serving as brokers who align their interests. The scarcity of liquidity within the primary market within the alternative asset class is leading to rising pricing in the secondaries market and we at Setter view this trend as positive for our business in terms of profitability.

What was your main highlights working in QUAAF?

I started along with the then past president of QUAAF who was based in Beijing and the two of us set up the Beijing link. With my assistance the team in Beijing conducted its first high-quality market research report and presentations, which impressed senior executives present at our Annual General Meeting (AGM), although we did not actually publish the report. Through this leadership role I had an opportunity to meet and network with very senior industry executives especially after my presentation at the AGM.

Do you have any career advice for the current students?

My advice to student is that they should try and be as active and open as possible to every learning opportunities that comes their way because they never know which of those opportunities will lead to their next bigger one. In addition to the classroom learning experience, students should also learn to connect and network with people during their course period or even in their future career.

From my experience as a MFIN student at Queen's, I can say with confidence that most of my key learning experiences came from outside the classroom. I really learned a lot just from extra extracurricular activities while on campus.

I’ve applied these same principles to my job. This allows me to reach people I would have never imagined I’d be doing business with.

My advice to student is that they should try and be as active and open as possible to every learning opportunities that comes their way because they never know which of those opportunities will lead to their next bigger one.
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