The private equity secondary market involves the purchase and sale of pre-existing LP interests in private funds, or direct stakes in portfolio companies, from an existing holder (seller) to a new investor (buyer). Transactions are typically priced at a discount to net asset value, reflecting the illiquidity premium the buyer is compensated for.
LP-led secondaries allow existing limited partners to achieve early liquidity without waiting for the GP to exit portfolio companies. GP-led secondaries — increasingly prominent since 2018 — involve the GP transferring assets into a new continuation vehicle, allowing existing LPs to cash out while new investors provide fresh capital. In Asia-Pacific, the secondary market has grown rapidly as regional markets mature and institutional LPs seek active portfolio management tools.