Hamilton Lane - Tue, 04/04/2023 - 16:28

What Does Secondary Market Growth Mean for You?

Few corners of private markets can match the recent growth of secondaries. Once the province of distressed sellers and “zombie funds," secondaries now involve the bluest of blue-chip LPs and GPs (see here and here). This evolution has helped annual volume rocket from $20 billion in 2008 to well more than $100 billion in 2021 and 2022.

And we continue to see the momentum build. In 2022, 50% of LP portfolio transactions involved first-time sellers.1 And as we have noted elsewhere, GPs are increasingly looking to get in on the GP-led secondary action.

So the momentum and traction is there. Against this backdrop, some investors are asking what the secondaries phenomenon means for them. While for others, the question is, “Can I responsibly ignore it?” Let’s revisit why this market has grown, but also explore what it means for investors. As always, we’ll do it with a dash of data.

1 Jefferies Global Secondary Market Review (January 2023)

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