Q2 2023
PitchBook Analyst Note: The Evolution of Private Market Secondaries
April 20, 2023
As the exit window shrinks, the secondary market grows in size—and complexity
The volume of secondary transactions per year has nearly doubled since 2020, showcasing a growing market for manager-led deals and more individualized liquidity options. Allocators at the mercy of a depressed exit environment and a subsequent drop in capital distributions are seeking refuge in secondaries, and with the maturation of this market comes heightened complexity.
At a high level, there are two types of secondary transactions: GP-led and LP-led. While the market started with the LP-led secondary transaction, GP-leds have gobbled up a significant portion of business in recent years, growing to become at least half of total secondary transaction volume. Our latest analyst note examines the key differences between these types of deals.
Table of contents
| Key takeaways | 1 |
| Introduction | 2 |
| The nature of private market investing | 2 |
| The development of the secondaries market | 3 |
| The first evolution of secondaries: Structured solutions | 6 |
| The second evolution of secondaries: GP-led secondaries | 6 |
| Perspectives on GP-led secondaries | 8 |
| Differentiating between LP-led and GP-led secondaries as an investment opportunity | 9 |
| Conclusion | 14 |