Why the Private Equity Secondary Market is Poised to Grow
via Private Equity Insights
The secondary market, where buyers and sellers trade existing interests in private equity funds and their portfolio companies, has grown to almost $90bn, a six-fold increase during the past decade.
PE has been growing as an asset class with total AUM reaching $6.5 trillion in 2020 vs. $2.4 trillion in 2010. While this growth in private equity has been going on for quite a while, driven by the search for higher returns in a low yield world, a more recent phenomenon has been the growth in the private equity secondary market.
When it launched in the 1990s, the private equity secondary market was primarily an option for limited partners looking to exit funds which were not performing well. Not anymore!