An LP-led secondary is a sale by an investor of its stakes in one or more funds to a buyer, often to raise cash or rebalance. The buyer takes over the stakes and their remaining commitments, usually at a discount or premium to reported value.
What the film says
In secondaries, you can sell your stake in a fund, before the fund ends. It's called an LP-led secondary. Say a pension plan holds stakes carried at five hundred million. But it needs cash now, and the funds have years to run. So it finds a buyer. Typically the manager has to consent. The buyer pays four hundred and fifty. That's fifty million under the paper value. Ninety percent of it. And the buyer takes over what's left to pay into those funds. So why do investors care? It gives investors a way out before a fund ends. Sometimes at a discount, sometimes at a premium. You can leave early. It has a price.
In the glossary: LP-led secondary
A simple example with round numbers, not advice. Terms vary by fund.
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