By
Key Takeaways
Private markets secondary funds—known as “secondaries”—help enable the buying and selling of pre-existing stakes in private market funds. These transactions can be initiated by investors (LP-led) or asset managers (GP-led) and may involve direct or brokered deals. For buyers, secondaries offer access to more mature investments and the potential for faster returns.
Growth in the secondaries market is a natural evolution of the growth in primary private market assets. Secondaries transactions provide liquidity for investors and allow asset managers to tactically rebalance their portfolios. Secondaries funds are dedicated investment funds that purchase these pre-existing commitments from limited partners (LPs) seeking to exit primary private equity funds before they are fully liquidated
Secondaries are characterized through two main transaction types:
These transactions can be complex and involve different vehicles including continuation funds, dedicated secondaries funds or fund-to-fund transfers.
Implementation Insight: A secondary fund can deploy capital faster and offer access to more mature assets and faster distribution ideal for shorter investment horizons.
Implementation Insight: Not all discounts are created equal—some reflect opportunity, others can signal stress in the market. Understanding the underlying assets is key.
| Myth | Fact |
| Secondaries always trade at a real discount | The ability to access private market exposure at a discount is a benefit to buyers. It’s important to note that discounts may not always exist and vary by asset class. |
| Secondary investing lacks transparency | Buyers can gain more visibility into the portfolio or individual investment—in contrast to blind pool risk of a primary fund. |
| Only LPs sell secondaries | GP-led continuation and recapitalization deals are common as portfolio rebalancing tools. |
IMPORTANT INFORMATION
The material herein has been provided to you for informational purposes only by Institutional Capital Network, Inc. (“iCapital Network”) or one of its affiliates (iCapital Network together with its affiliates, “iCapital”). This material is the property of iCapital and may not be shared without the written permission of iCapital. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of iCapital.
This material is provided for informational purposes only and is not intended as, and may not be relied on in any manner as, legal, tax or investment advice, a recommendation, or as an offer or solicitation to buy or sell any security, financial product or instrument, or otherwise to participate in any particular trading strategy. This material does not intend to address the financial objectives, situation, or specific needs of any individual investor. You should consult your personal accounting, tax, and legal advisors to understand the implications of any investment specific to your personal financial situation.
ALTERNATIVE INVESTMENTS ARE CONSIDERED COMPLEX PRODUCTS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. Prospective investors should be aware that an investment in an alternative investment is speculative and involves a high degree of risk. Alternative investments often engage in leveraging and other speculative investment practices that may increase the risk of investment loss; can be highly illiquid; may not be required to provide periodic pricing or valuation information to investors; may involve complex tax structures and delays in distributing important tax information; are not subject to the same regulatory requirements as mutual funds; and often charge high fees. There is no guarantee that an alternative investment will implement its investment strategy and/or achieve its objectives, generate profits, or avoid loss. An investment should only be considered by sophisticated investors who can afford to lose all or a substantial amount of their investment.
iCapital Markets LLC operates a platform that makes available financial products to financial professionals. In operating this platform, iCapital Markets LLC generally earns revenue based on the volume of transactions that take place in these products and would benefit from an increase in sales for these products.
The information contained herein is an opinion only, as of the date indicated, and should not be relied upon as the only important information available. Any prediction, projection, or forecast on the economy, stock market, bond market, or the economic trends of the markets is not necessarily indicative of the future or likely performance. The information contained herein is subject to change, incomplete, and may include information and/or data obtained from third-party sources that iCapital believes, but does not guarantee, to be accurate. iCapital considers this third-party data reliable, but does not represent that it is accurate, complete, and/or up to date, and it should not be relied on as such. iCapital makes no representation as to the accuracy or completeness of this material and accepts no liability for losses arising from the use of the material presented. No representation or warranty is made by iCapital as to the reasonableness or completeness of such forward-looking statements or to any other financial information contained herein.
Securities products and services are offered by iCapital Markets, an SEC-registered broker-dealer, member FINRA and SIPC, and an affiliate of iCapital, Inc. and Institutional Capital Network, Inc. These registrations and memberships in no way imply that the SEC, FINRA, or SIPC have endorsed any of the entities, products, or services discussed herein. Annuities and insurance services are provided by iCapital Annuities and Insurance Services LLC, an affiliate of iCapital, Inc. “iCapital” and “iCapital Network” are registered trademarks of Institutional Capital Network, Inc. Additional information is available upon request.
©2025 Institutional Capital Network, Inc. All Rights Reserved.
ACA#791930 08/25
