Financial investors: Secondary market funds - the doubtful saviors of private equity
The secondary market for private equity investments is booming - and offers the industry a much-needed opportunity to return capital to investors. But the risks are considerable.
Several major investors, including Singapore's GIC, Harvard University's endowment, and Dutch pension fund ABP, have recently sold parts of their private equity portfolios on the secondary market. They sold to financial investors like Blackstone, KKR, and Carlyle, which specialize in so-called secondaries strategies, buying into private equity funds that other investors want to exit early.
The secondary market has grown rapidly, with $260 billion in transactions in the 12 months to June 2026, according to Lazard, doubling since 2021. This market allows sellers, or limited partners, to access cash sooner, while buyers, or general partners, acquire potentially lucrative private equity stakes at a discount. Philipp Bunnenberg of the German Association of Alternative Investments notes that investors are selling on the secondary market to generate liquidity in their portfolios.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
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