October 21, 2026 · 6 min read
What Are Private Equity Secondaries? Definition and Examples
How investors sell stakes in private equity and venture funds before the funds end, how those stakes are priced and which rules apply.
- Private markets & secondaries
Secondary-market private equity is the trade in stakes that investors already hold in private equity and venture capital funds. A pension fund can sell its fund stake years before the fund winds down. Or a fund manager can move companies into a new vehicle and let investors cash out. Sellers get cash early. Buyers get assets that are already invested.
If you invest in a private fund, this market is how you can leave before the fund ends, usually at a discount to its reported value. If you hold shares in a single startup, the market for those shares is explained in secondary transaction.
$118B
Global secondary volume in the first half of 2026, up 15% from $103B a year earlier
$240B
Global secondary volume for the full year 2025
53%
Share of volume led by fund managers, $62B, against $56B sold by fund investors
87%
Average price of fund-investor portfolios as a share of reported value. Venture stakes: 79%
What Are Private Equity Secondaries?
A private equity fund is a partnership. A manager, the general partner (GP), runs it. Investors, the limited partners (LPs), promise money up front and pay it in over several years when the GP asks. Each request is a capital call. Funds usually run for about a decade, and LPs cannot simply redeem. The general partner vs limited partner page explains the roles.
Buying into a new fund is a primary investment. Buying an existing stake from someone else is a secondary. The buyer steps into the seller’s place: it owns the companies the fund already holds and takes on any money still to be called.
- LP-led
- A fund investor sells its stake, or a portfolio of stakes, to a secondary buyer. The fund itself does not change.
- GP-led
- The manager sells one or more companies from an old fund to a new vehicle it also manages, often a continuation fund. Existing LPs choose to take cash or roll into the new vehicle.
How Do LP-Led and GP-Led Secondaries Work?
The table compares the two on who starts the deal, what is sold, who must agree and how the price is set.
In an LP-led sale, the investor changes. In a GP-led deal, the vehicle changes
Volumes: Jefferies, Global Secondary Market Review (07.2026). Mechanics: standard US fund practice as of October 2026.
An LP-Led Sale, Step by Step
- Decide what to sellThe LP picks one stake or a portfolio, often to raise cash or trim an overweight position.
- Run a processAn adviser shares fund reports with several buyers and collects bids.
- Agree a priceBids are a percentage of NAV, the fund’s reported value, on a reference date. Some deals pay part of the price later, a deferral.
- Get consentThe GP approves the transfer and the new LP under the partnership agreement.
- CloseThe buyer pays and takes over the stake, including future capital calls.
GP-Led Deals and Continuation Funds
A continuation fund lets a manager keep a company past the old fund’s life. New investors put up the cash that pays LPs who want out. In the first half of 2026, single-asset vehicles, holding one company, made up 68% of continuation funds. Jefferies counts 82 of the top 100 sponsors by assets as having used one.
Because the manager is both seller and buyer, LPs need a fair price. The SEC adopted a rule requiring registered advisers to get a fairness or valuation opinion from an independent provider in these deals. A federal appeals court vacated it, with the other private fund adviser rules, on June 5, 2024. Price checks now rest on fund agreements and market practice.
How Is a Fund Stake Priced?
Buyers price a stake against its net asset value (NAV), the GP’s estimate of the fund’s holdings. They also take over the unpaid part of the commitment. Here is one sale.
Illustrative figures for an invented fund. The seller gets $8.1M today and no more capital calls. The buyer pays $8.1M now and owes up to $2.0M later
Illustrative example · as of October 2026.
In practice, prices vary by asset. In the first half of 2026, LP portfolios sold at 87% of NAV on average, Jefferies reports. Venture stakes averaged 79%. About a third of LP sales used some structure, most often a deferred payment.
The Secondary Market in VC: Fund Stakes and Startup Shares
In venture capital, the secondary market has two layers. The first is the same as in buyout: LPs sell stakes in venture funds. Those stakes trade at wider discounts, 79% of NAV on average in the first half of 2026. Jefferies reports wide gaps between portfolios of top managers and the rest.
The second layer is direct: founders, employees and early investors sell shares in a single startup. Sales of existing venture-backed shares reached $61.1B in the year to mid-2025, Carta reports. That market has its own rules, such as company consent and rights of first refusal. It is covered in secondary transaction and tender offer.
Key Rules for Fund Secondaries, as of October 2026
No single rule governs secondaries. Several US rules limit who can hold a fund stake and how freely it can change hands, so GPs control every transfer.
Securities and tax rules make each transfer the GP’s decision. That is why every secondary needs the manager’s consent
As of October 2026 · 15 U.S.C. 80a-2(a)(51), 80a-3(c); 26 CFR 1.7704-1; 17 CFR 230.501; SEC announcement (10.31.2024) and vacated rule text. US rules only.
Why Investors Use the Secondary Market
Sellers mostly want cash. Funds have been returning money slowly. In the first half of 2026, LPs got back about 10% of their portfolios a year in distributions, Jefferies estimates. The average since 2001 is 25%. Pension and sovereign wealth funds supplied 48% of LP sales. Others sell to rebalance or to wind down old positions.
Buyers get assets they can see before they pay. They skip the early years when a new fund is still investing, and they often buy below NAV. In exchange, they rely on the GP’s estimates and may inherit a concentrated portfolio, especially in single-asset deals.
Dedicated secondary funds held $290B of capital ready to invest at mid-2026, down from $327B at the end of 2025. That reserve is a form of dry powder.
Common Mistakes About Private Equity Secondaries
- Confusing fund stakes with startup sharesA fund secondary sells an interest in a partnership. A startup secondary sells shares in one company. The rules and buyers differ.
- Treating NAV as a priceNAV is the GP’s estimate. Sale prices averaged 87% of it in the first half of 2026, and 79% for venture.
- Forgetting the unfunded partThe buyer takes over future capital calls. Count them in the real cost.
- Assuming you can sell freelyThe GP must consent, and tax and securities rules can limit transfers.
- Ignoring the conflict in GP-led dealsThe manager sets terms for both sides. Read how the price was tested before you choose to sell or roll.
Private equity secondaries turn locked-up fund stakes into cash, usually below their reported value. The seller gives up part of the value to get cash now. The buyer relies on the GP’s estimates and, in return, waits less for distributions.
The Terms This Page Uses
- Private equity secondaries
- Sales of existing stakes in private equity and venture funds, or of fund assets, to new investors.
- LP-led secondary
- A fund investor sells its fund stake to a secondary buyer with the GP’s consent.
- GP-led secondary
- A fund manager moves assets into a new vehicle and lets existing investors cash out or roll over.
- Continuation fund
- A new vehicle, run by the same manager, that buys one or more companies from an older fund.
- Unfunded commitment
- Money an LP has promised but the fund has not yet called. A buyer takes it over.
- Capital call
- A GP’s request for LPs to pay in part of their commitment.
- Qualified purchaser
- An individual with at least $5M in investments, under the Investment Company Act.
- Deferral
- Part of the price in a secondary sale paid at a set later date.
What People Ask About Private Equity Secondaries
Where Every Figure on This Page Comes From
Figures were last checked on October 21, 2026. Market volumes and prices are Jefferies estimates based on its own data. Rules are cited for the United States.
- 01Jefferies07.2026Global Secondary Market Review — H1 2026 volume $118B, 2025 $240B, LP / GP-led split, pricing as % of NAV, structures, distributions, dedicated capital
- 02Cornell LII · 15 U.S.C. 80a-3Current lawSections 3(c)(1) and 3(c)(7): 100-person limit (250 for qualifying venture funds) and qualified-purchaser funds
- 03Cornell LII · 15 U.S.C. 80a-2Current lawSection 2(a)(51): qualified purchaser, $5M in investments
- 04Cornell LII · 26 CFR 1.7704-1Current rulePublicly traded partnership safe harbors: 100 partners, 2% of interests transferred
- 05US Securities and Exchange Commission10.31.2024Announcement regarding the Private Fund Advisers rules — vacated on June 5, 2024, including Rule 211(h)(2)-2
- 06US Securities and Exchange CommissionUndatedVacated rule text — Rule 211(h)(2)-2: fairness or valuation opinion from an independent provider in adviser-led secondaries
- 07Cornell LII · 17 CFR 230.501Current ruleAccredited investor tests
- 08CartaQ2 2025VC secondary trends — $61.1B of venture secondary volume
This page explains how a market works. It is not investment advice, not a recommendation of any security, strategy or company, and not an offer to sell or a solicitation to buy anything. Private companies may never list or be acquired, positions in them can be illiquid for years, and the entire amount invested can be lost. Figures are accurate as of the dates shown and change. Requirements for investor status, and the tax treatment of a private holding, differ by jurisdiction — the jurisdiction is named wherever this page discusses either. Prepared by the AXEVIL Capital research team.
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The rounds that priced, the tender offers that opened and the listings that filed — with the structure of each deal and the date on every figure. Written by the team that reads the paperwork.
Where to go from here
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Private markets & secondariesWhat Is a Tender Offer? Definition, How It Works and ExamplesTender offer explained: an open offer to buy shares from many holders at a set price for a limited time. How private-company tenders work and who can sell.
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