Private Equity Secondaries

Private Thoughts From My Desk…….#40   The secondary market is warming up.   That is the unambiguous message from the Campbell Lutyens 1H 2025 report. With $110 billion in volume during the first half alone, this market is now operating at a scale and speed few would have imagined even two years ago. But beyond the headline figures, what stood out to me most was the continued evolution of GP-led deals—specifically, the fact that over half of these transactions priced at or above par (See chart below).   Yes, you read that right. Par. In a secondary market.   This is not just a technical pricing detail. It is a signal that something fundamental is happening in private markets. GP-led secondaries are becoming the preferred path for some of the best-performing assets in private equity. Pricing at or above par is not just a win for GPs and existing LPs. it is a reflection of intense demand among buyers who are now competing for access to scarce, high-quality paper.   What’s driving this pricing strength? A few things stood out. First, the selection bias. GPs are not bringing just any asset to market. They are bringing trophy assets. Cash generative. Durable. Often tech-enabled or exposed to long-term secular tailwinds. That kind of quality commands a premium in today’s environment.   Second, the supply-demand balance has shifted. Dedicated GP-led vehicles now control more than $31 billion of dry powder. Traditional secondary funds continue to raise more capital and do more GP-led deals. Sponsors have pricing leverage they simply did not have before.   And it’s not just single-asset deals that are seeing the love. Multi-asset continuation vehicles—long considered a harder sell due to structural complexity—are also seeing meaningful momentum. In fact, 44% of MACVs priced at or above par, a staggering jump from just 28% in 2024. This tells me the market is heating up. This is a trend. The presence of evergreen vehicles and more specialized capital has added further depth to the buyer pool. The result is a more liquid, more competitive, and more pricing-efficient market.   For GPs, the message is clear. The secondary market is no longer just a tool for liquidity. It is now a strategic extension of fund management. And for LPs, pricing at or above par is a signal that continuation vehicles, once viewed with a touch of skepticism, are delivering real value.   If this keeps up, we may need to start treating the secondary market as one of private equity’s most dynamic growth engines. #privateequity #privatemarkets #privatethoughtsfrommydesk

Secondaries Are Quietly Taking Over Not a niche anymore. A core strategy for uncertain times. What raised 30% of all private equity capital last quarter—and why aren’t more people talking about it? Secondaries aren’t just a side dish anymore. In Q1 2025, they accounted for 30% of all global PE fundraising—the highest share ever recorded. That number was inflated by one $30B fund close. But don’t let the outlier distract you from the trend. This is structural. Not cyclical. Here’s what’s changed: - LPs want liquidity without giving up exposure. - GPs need more time—and vehicles—to unlock value. - Everyone’s under pressure from slower exits and longer J-curves. Secondaries offer flexibility, price transparency, and faster capital recycling. From my CIO seat, they’ve moved from “interesting” to essential. It’s also where dislocation becomes investable. Discounts are real. Quality is up. And vintage diversification is built-in. What we’re watching - Continuation fund terms and volume - Discount levels in LP-led deals - Secondary pricing trends vs. reported NAVs Investor action plan - Reframe your allocation lens: Secondaries aren’t just tactical—they’re foundational. - Monitor manager selection: Skill dispersion is wide in secondaries. - Match secondaries to outcomes: Want cash flow? Vintage diversity? - Quicker turns? Clarify the goal. If the front door of private equity is slow, the back door is now an opportunity in itself. #bealtetnative #alternativesforall

Private market secondaries, from 2022-2023, experienced fundraising growth in excess of ~100%—the highest of any sector.* Key driving factors of this growth are post-ZIRP portfolio rebalancing as a byproduct of over-exuberance (denominator effect), a relatively closed IPO window, muted M&A activity, and the private markets valuation “lag”, among others.  This broader market reset and increasing robustness of secondaries markets can present a compelling opportunity for private market investors. Investors should broadly consider how their portfolios are positioned with respect to the valuation lag—on both sides—situationally executing dispositions and adding exposure, where favorable.  For example, in 2022, the unprofitable public markets tech index was down ~70% and private market valuations remained largely unchanged—we took this opportunity to conduct a full review of our portfolio exposure to high-growth, unprofitable portfolio companies. As a result, we exited a significant amount of such exposure.   And now, nearing the end of 2024, the converse is largely true—private market valuations have generally lagged those of their public market counterparts—creating a situation where adding exposure via secondaries can be attractive in select pockets of the market.   For example, in private equity, there are instances of indiscriminate selling for both single-asset exposures and LP interests at relatively low multiples (<6x EBITDA) with durable cash flow and strong fundamentals. In such a case, adding exposure can offer favorable risk/return asymmetry.    Here’s a quote from one of our investment partners regarding the opportunity in private equity continuation vehicles, “80-90% of the LPs on the other side of the trade (i.e., the sellers), didn’t even look at the data room.”   Investors should have a deep understanding of underlying valuation policies, actively monitor their exposures, and be proactive in secondaries to create value for clients and generate excess return.  *Source: Pitchbook, 2024.   

If you only watched the stock market tickers in #2025, you missed half the story. While IPOs captured headlines, a quieter shift played out across India’s private ecosystem. Secondary transactions in unlisted companies moved from being occasional to becoming a planned part of liquidity and exit strategies. Early investors, founders and employees increasingly took partial liquidity without forcing an IPO. At the same time, capital actively flowed into proven private businesses through structured secondary routes. The entry and expansion of dedicated secondary funds in India during 2025 underlines how institutional this market has become. Based on industry estimates and reported activity, total secondary transaction volume in India’s unlisted space is estimated at roughly $10Bn to $20Bn in 2025. Most of this activity remains private, but the scale is now hard to ignore. On pricing, most secondary deals were done at sensible discounts to the latest primary valuation, reflecting liquidity, timing, and a win-win for both buyers and sellers. Some of the largest and most active secondary stories of the year included: NSE India - Continued to be among the most actively traded unlisted assets, with strong institutional participation ahead of a potential listing. Lenskart.com - Pre-IPO secondary transactions that allowed early investors and ESOP holders to monetise partially. PhonePe - One of the biggest secondary-led liquidity events, driven largely by employee and early investor exits ahead of its IPO journey. Zepto - Large secondary sales and discussions alongside late-stage funding rounds to provide liquidity while reshaping long-term ownership. 2025 also saw companies like Pine Labs, Shadowfax, Urban Company, BlueStone, Meesho, Fractal, Kuku FM, BharatPe, Flipspaces, Porter (to name a few) where secondary components provided targeted liquidity rather than headline exits. Why this matters: - For LPs, DPI and real cash returns matter more than paper valuations. - For founders and employees, secondaries turn years of effort into real outcomes. - For late-stage investors, they offer access to proven companies with better risk reward ratio. As we enter #2026, the capacity to facilitate secondary liquidity remains a key differentiator for top-tier funds and late-stage startups. incentiv Tabulate Ranjit Sundaram Diganth Jagadish Indranil Tiwary #PrivateMarkets #SecondaryDeals #UnlistedShares #VentureCapital #PrivateEquity #IndiaStartups #Liquidity #Exits

The rise of the secondaries market is a significant development for venture capital. We’re seeing: ✅ Funds launching dedicated secondary vehicles ✅ Platforms facilitating both LP- and GP-led transactions ✅ Institutional buyers looking to access high-growth companies at more rational valuations Just last month, Turbine Finance (led by CEO Mike Hurst) launched a new dedicated secondary platform. It’s a trend worth watching - and here’s why: - The global secondaries market hit a record $162B in 2024, up 45% from ~$112B in 2023 (Jefferies) - In 2023, secondaries made up 12.6% of global VC deal activity - an all-time high - More than 50% of LPs now use secondaries proactively for portfolio management - not just emergency liquidity When do secondaries make sense for VCs? ✅ Toward the end of fund life - Lock in gains and return capital with more certainty ✅ During market exuberance - 2020-21 vintage companies traded at extreme multiples; locking in value at the top was a smart move ✅ GP-led continuation vehicles - Ideal when the asset is still strong but LPs need liquidity, especially in older funds When don’t they make sense? 🚫 Too early in the fund’s lifecycle - Selling too soon creates misalignment with LPs who backed you for long-term upside 🚫 When market conditions are rebounding - Selling at a discount before a turnaround can be short-sighted 🚫 To manufacture DPI at the expense of long-term TVPI - Sophisticated LPs see through short-term optics plays Secondaries are becoming a healthy part of a mature venture ecosystem. They unlock liquidity, help manage risk, and create opportunities for both buyers and sellers - but only when aligned with LPs’ long-term interests. Tagging just a few of the sharp minds shaping this space: 🔹 Andy Tryba, Ionic Partners 🔹 Alli Murdoff, Section Partners 🔹 Shawn Olsen, s20 Capital 🔹 Brian Scanlon, Trilogy 🔹 Gene G., Welsbach Holdings 🔹 Fred Lee & Christopher Bayliss, Revelation Partners 🔹 Eric Thomassian, Forge Innovation & Ventures 🔹 Gaurav Mathur, Pinegrove Venture Partners Curious to hear from the community: 👉 Who else is actively buying in the venture secondaries market today?

Private Equity’s New Liquidity Hacks: Smart Innovation or Slippery Slope? Exits are kinda tough right now. IPO windows are thin, strategic buyers are cautious, and funds are under pressure to show returns. So GPs are getting creative. The Dechert Global Private Equity Outlook 2025 report points to two tools taking off fast: • GP-led secondaries → letting managers keep holding on to “trophy assets” while giving LPs an option to cash out • NAV-based financing → using the fund’s portfolio as collateral to borrow and send cash back to investors Both approaches solve a real problem: how to get liquidity in a market where exits are scarce. And they’re not fringe anymore - 82% of respondents in the report expect secondaries activity to stay buoyant or increase over the next two years, after growing 4x in the past five. But they also raise some thorny questions. If GPs are setting the value of assets they still control, how much transparency do LPs really have? And could these structures create conflicts of interest down the line? For some investors, it’s a welcome bridge until exits pick back up. For others, it’s a red flag that could complicate alignment between managers and LPs. ❓ The big unknown: Are these clever fixes that will stick around as part of the toolkit - or temporary band-aids that could erode trust if overused?