What is a GP-led secondary?

Typically arises near the end of a fund’s term, when the manager wants more time to hold a strong asset. A third-party price is usually set through a competitive process, often with a fairness opinion, and the LPAC is commonly asked to approve the conflict. Rolling investors often get new terms. Distinct from an LP-led secondary, where an investor sells its own fund interest.

Say a manager moves two companies from an older fund into a new vehicle. Secondary investors put in $400 million, and existing investors can sell or roll.

It is now a major route to liquidity, and a conflict of interest, because the manager sits on both sides.