Private markets are evolving fast, and angel investors no longer have to sit on the sidelines. With an SPV (special purpose vehicle) in private credit and secondaries, investors can access strategies once limited to institutions, such as direct lending and late-stage equity.
In this guide, we’ll break down how SPVs open doors to private credit, how they enable access to secondary investments, the benefits and risks for angel investors, and the practical steps to get started.
Why Angel Investors Use SPVs
If you’re an angel investor, gaining access to deals typically reserved for massive funds used to mean high minimums and overwhelming administrative burden. That era is over.
The SPV in private credit and secondaries has democratized these opportunities, providing the sophisticated structure necessary for angel investors to expand their portfolios beyond traditional equity risk.
An SPV is a dedicated legal entity formed solely for the purpose of executing one specific investment. This mechanism keeps investment processes clean, focused, and easy to manage over the long term, avoiding the complexity of setting up an entire fund.
Benefits of SPVs for Angel Investors
Using SPVs isn’t just about legal structure; it’s about what’s possible:
Access to Institutional-Grade Deals
SPVs open the door to opportunities once reserved for pensions and large funds. Angels can now participate deal by deal, with smaller check sizes, in areas like direct lending, mezzanine credit, or late-stage secondary shares.
Cleaner Cap Tables and Lower Friction
Startups love streamlined cap tables. Instead of dealing with 20 or 50 angel names, they deal with one SPV, which offers less complexity, faster negotiation, and more attractive terms from the startup side.
Risk Pooling + Liability Isolation
Pooling capital means that even smaller angel investors can participate in large deals. And because SPVs are separate entities, the downside is capped at what was invested in the SPV.
Portfolio Diversification
SPVs open the door to balancing equity exposure with credit, late-stage equity, and secondaries. This lets angels smooth out volatility across different asset types.
Flexibility and Control
Investors decide which deals to back. Unlike blind-pool funds, SPVs allow picking opportunities one by one.
Professional-Grade Structuring
With the right platform, SPVs deliver clean governance, clarity on investor rights, and professional administration. This boosts both credibility and confidence.
SPV as a Gateway to Private Credit
Private credit means lending outside traditional banks. These loans come with flexible terms, often custom-built covenants, sometimes floating interest rates, and may require collateral. And SPVs change the game here:
- Angels can participate in direct loans, mezzanine structures, or even niche credit strategies without setting up a full fund.
- You pick deal by deal. If you prefer one credit opportunity over another, you’re not locked in, unlike a blind pool.
Interested in structuring your first private credit SPV or secondary deal without losing control? Talk to our expert and let’s plan your roadmap to institutional-grade access.
Unlocking Value in Secondary Markets through SPVs
Secondaries involve the buying and selling of existing investor positions in privately held companies or funds, contrasting with primary transactions where capital is provided directly to the company.
Secondary SPVs facilitate these transactions by pooling individual capital to meet the higher minimums often required for such deals.
Here’s how SPVs help angels participate in secondaries, and what to watch out for.
- LP-led Secondary Sales – An existing fund investor (an LP) wants out; an SPV buys their stake. Angels gain indirect exposure to older assets without the risk of a blind pool.
- Direct Secondary Trades in Late-Stage Startups – Early employees or early investors sell their shares pre-IPO; an SPV aggregates investor capital to facilitate the purchase.
- Asset/Loan Secondary Pools – SPVs can also purchase pools of debt or loans being sold off, often at a discount.
The secondary market is maturing rapidly. As one source puts it, “Secondaries are a core component of private market investing, offering liquidity for sellers and compelling benefits for buyers.”
Practical Steps to Launch an SPV for Private Credit or Secondaries
- Define your deal thesis: What kinds of credit? Which sectors? What stages? What geography?
- Choose legal structure: Your SPV can be set up as a Pte. Ltd. in Singapore or as a Portfolio within a Segregated Portfolio Company (SPC) in the Cayman Islands, depending on jurisdiction. Define transparent governance—who decides, how rights are set, and what happens if a deal fails.
- Pool capital: Set minimums, onboarding, and reporting expectations.
- Source deals: Build pipeline, negotiate terms, diligence.
- Monitor, manage, and exit: SPV is deal-by-deal, so exit tools or liquidity (via secondaries) need planning.
Final Thoughts
You don’t need to be a pension fund to play in the sophisticated corners of private markets. SPVs are the tool that lets angels do just that, with more control, more diversification, and more optionality. But smart execution matters: define your terms, guard against hidden costs, and build with clarity.
Need help designing an SPV structure tailored for private credit or secondaries? Book a call with us or get in touch with us at info@auptimate.com, and one of our experts will be more than happy to help.
