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Private Equity: Shifting to the Secondary Market

The secondaries market is a small pocket in comparison to primary private equity investments, however, it is proving to be an increasingly attractive tool from both the perspective of GP led deals, to LP portfolio sales. The increased activity in the PE secondaries market comes as a direct result of public market volatility and increased interest rates, creating a highly attractive private market for investors. Therefore, having over-allocated into private investments, LPs and GPs turned to the secondaries market for liquidity.

LPs selling PE investments on the secondaries market has doubled from 2021 to 2022, resulting in selling prices being driven down due to the increasingly populated market. Increasing transaction volume and sophistication across the secondaries market is set to continue as the macroeconomic climate adjusts in 2023.

The value of secondary deals led by private equity investors, or so-called limited partners, reached $56 billion last year, accounting for 52 percent of the total value of transactions, according to the latest PE secondary market report from Jefferies. It was the first time since 2019 that PE investors represented a larger share of the secondary market than general partners.


private markets, private equity, secondaries, executive search

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