PE Glossary
Secondary
Secondary · The sale of an existing LP interest in a PE fund to another investor, or the acquisition of a portfolio company from one PE fund by another (secondary buyout). Secondaries provide liquidity in an otherwise illiquid market.
Example
An LP needs liquidity and sells its remaining commitment in a 2017-vintage fund to a secondary buyer for €40M (versus the €60M NAV). The secondary buyer takes over future capital calls and receives all future distributions, accepting a discount in exchange for the LP's exit.
Related terms
Put Secondary in context
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