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Why Buy?

Secondary acquisitons help buyers:

  • Mitigate J-Curve effects

  • Eliminate blind-pool investment risk
  • Increase private equity diversification

  • Shorten private equity portfolio duration

  • Backfill vintage year allocation gaps

  • Shift strategy or geographic concentration

Why Sell?

Secondary sales can help sellers mitigate:

  • Expected underperformance for certain funds or sectors

  • Longer than expected liquidity profile

  • Excessive manager coverage and reporting

  • Vintage year, geography, or strategy over-concentration

  • Regulatory compliance

Since the financial crisis, the secondary private equity market has seen increasing yearly volumes, with 2019 volume surpassing an estimated $80 billion. This tremendous growth has been driven by a number of circumstances, including increased primary private equity commitments, regulatory overhang, and proactive portfolio rebalancing. These increased volumes are sustainable, as secondary sales benefit both buyers and sellers.

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