Secondary Market

Know more about gain and loss of private equities & others alternate investment funds (AIFs)

What is Secondary

In finance, the private equity secondary market (also often called Private Equity Secondary or Secondary) refers to market of pre-existing investor commitments to private equity and other alternative investment funds.

These interests include both commitments that have already been drawn down by the GP and unfunded commitments.

Evolution of Secondary Market

The secondary market is continuing to respond to new liquidity needs

Secondary market | Private equities funds
Primary vs Secondary AIF

For an overwhelming majority, there is a clear return advantage through secondary AIFs

IRR for Primary Investor IRR for Secondary Investor
MORE IREF-2 21.59% 40.33%
ASK RESOF 12.46% 32%
IDFC SPICE 14.61% 48%
Why are secondary funds attractive?
Diversification by investment stage, geography, industry sector, fund manager and vintage year.
Access to 'Invitation'-only funds that are available to limited primaries
Superior risk-adjusted returns due to mature, well-invested portfolios
Discount to primary buy-in rates
Insight into the strategies of primary fund GPs
Reduce capital-at-risk through quicker return of capital and lower ‘J- Curve’ effect since investments benefit from asset realization
Know more about an unlisted equity before it goes public
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