Cendana Capital, led by founder Michael Kim, made a notable strategic step when it formed an alliance with Kline Hill Partners. Collectively, they are rolling out a cool new investment vehicle, the Kline Hill Cendana Partners fund. The result is a fund that has killed it, raising $105 million to date, well beyond its original goal of $75 million. It intends to take equity positions in early-stage venture capital funds. The announcement follows on the heels of Kim’s observation that there is a greater trend occurring among family offices to be looking for liquidity from their investments.
Michael Kim is the founder and managing director of Cendana Capital. He underscored the importance of the newly created Reconnect Fund. Cendana Capital has approximately $278 million under management earmarked for investment into emerging managers. This extra money will allow us to deepen our impact and presence throughout the venture capital ecosystem. The new Kline Hill Cendana Partners fund aims to acquire secondary interests in seed-stage firms and individual companies supported by seed funds. This strategy addresses the increasing desire for liquidity from their current investors.
In Kim’s recent conversations with our portfolio funds, he has observed a pattern. Thousands of family offices are chomping at the bit to buy their commitments, which are usually just $2 million or so. He believes that this need for liquidity will continue, providing further opportunities to invest in years to come. “Raising money for the $105 million fund was easy,” Kim stated, reflecting on the strong demand from investors.
The Kline Hill Cendana Partners fund will operate with a clear strategy: Cendana Capital will identify potential investment opportunities, while Kline Hill will handle the valuation, underwriting, and negotiation processes. This collaborative, one-stop-shop approach ensures a thorough analysis of the market, and the broadest possible base for returns on investment.
Kim was excited about the prospect of increasing Cendana Capital’s stake. She wants to be able to invest in promising venture funds and promising startups at discounted prices. Katz observed that a lot of the current secondary market players are too big to be able to go after those niche opportunities effectively. Kline Hill Partners has found a very fruitful niche in the secondary VC market. Since opening its doors in 2015, the firm has quickly become a leader in this space.
Chris Bull, a managing director at Kline Hill, tells me Kim is right about their partnership with Cendana. He sees working together with Cendana as introducing the essential knowledge and wisdom into the investment cycle. This unique synergy between Cendana Capital and Kline Hill makes their combined strengths a powerful force for mastering the intricacies involved in seed-stage investments.
The new plan is to fully deploy the $105 million fund by the end of 2024. This timeline represents a brilliant strategy for deploying capital. It allows both companies to capture unique opportunities in the evolving VC market. Family offices, high net worths and family investors are all avidly seeking a liquidity solution. The Kline Hill Cendana Partners fund is a promising avenue for people who want to sell their interests.