Secondaries
Secondaries involve buying existing private fund interests or portfolios from current holders to gain exposure with modified liquidity and pricing.
Definition
Secondaries transactions transfer existing LP interests (or portfolios) to new buyers, often providing earlier distributions and reduced blind-pool risk compared to primaries. Allocator Context Allocators use secondaries for liquidity management, vintage smoothing, and portfolio rebalancing. Decision Authority Often committee-approved due to pricing complexity, legal structures, and exposure implications. Why It Matters for Fundraising Secondaries managers must demonstrate sourcing edge, pricing discipline, and portfolio construction rigor; allocators are highly fee- and process-sensitive. Key Takeaways Exposure via existing interests Used for liquidity and pacing control Pricing and diligence are central Often faster path to distributions