Private equity was once a one-way street: you invested, locked your capital for a decade, and waited for the fund’s natural exit cycle. Today, there’s another path emerging—the secondary market.
For high-net-worth individuals, family offices, and institutional investors navigating private market investments, the rise of secondary private equity markets represents a fundamental shift: offering liquidity without (necessarily) sacrificing long-time value.
At Growmont, we see secondary markets not as a “plan B,” but as a strategic tool useful for portfolio rebalancing, risk management, or opportunistic entry into high quality assets at a discount.
What Are Secondary Private Equity Markets?
Secondary markets allow existing investors in private equity funds (Limited Partners or LPs) the option to sell their stakes—before the fund reaches maturity.
It can involve:
- LP Secondary Sales: An LP sells their interest in an existing fund – transferring both remaining commitments and rights to future distributions.
- GP-Led Secondaries: Where the General Partner restructures or extends ownership of certain assets by creating new vehicles.
Instead of waiting 8–10 years for the fund to liquidate, secondaries allow investors to exit earlier, unlock capital, or rebalance portfolios.
And for buyers, it offers a chance to acquire seasoned assets—often at discounts—without assuming early-stage investment risk.
Why Are Secondaries Gaining Momentum in India?
While well-established globally, the secondary Private Equity markets in India are relatively emerging—but growing fast.
Key drivers:
- Maturing vintage funds (especially from the 2012–2017 cycle) seeking liquidity options
- Family offices and treasuries needing portfolio rebalancing, manage cash flows, or reduce overexposure to illiquid assets.
- Fund managers optimising asset exits amidst unpredictable public markets
- Greater investor sophistication, willing to navigate the complexity of secondary deals in exchange for for tailored, risk-adjusted solutions
What was once a defensive strategy is now being seen as an active portfolio management tool.
The Advantages of Engaging in Secondaries
For sellers:
- Liquidity without waiting for traditional exit events
- Portfolio cleanup, removing illiquid or underperforming holdings
- Reinvestment flexibility into newer or more attractive opportunities
For buyers:
- Transparency into portfolio companies’ performance (no early-stage uncertainty)
- Discounted entry points, especially in distressed or complex deals
- Shorter holding periods to exit, offering the potential for faster realizations and a compressed investment timeline
As is stands, we often advise sophisticated clients to selectively acquire secondary interests when looking for accelerated private equity exposure—without the blind-pool risk.
The Hidden Complexities Investors Must Know
Secondary private equity markets offer unique opportunities—but they come with structural challenges that investors must not overlook.
- Pricing discovery is opaque—sellers may face steep discounts, depending on the fund’s performance and vintage.
- Legal and consent processes are cumbersome, involve multi-party approvals, particularly in cross-border fund structures.
- GP alignment is critical—especially in GP-led restructurings where conflict of interest can arise.
- Due diligence is intensive—requiring asset-by-asset underwriting, i.e the current and the projected value of individual portfolio companies, not just fund performance
Secondary deals are not part of a liquid marketplace—they are engineered transactions that require a combination of technical skill, strategic insight, and trusted relationships. We guide clients through these complexities—ensuring that every secondary opportunity is not only attractive, but well-understood and well-structured.
Growmont’s Approach: Strategy Over Transaction
At Growmont, our evaluation of secondary opportunities is methodical and investor-focussed. We approach them as strategic decisions that demand rigor, alignment, and foresight.
- We assess the quality of underlying portfolio companies—not just fund reputation.
- Review NAV marks critically, against private market comparables.
- We analyze portfolio cash flows, debt levels, and exit timelines to identify hidden structural risks.
- Prioritise transactions where GP alignment is transparent and investor interests are protected.
For sellers, we assist in strategic exit planning to avoid forced sales. For buyers, we structure acquisitions to optimise downside protection and recovery timelines. Because in private equity secondaries, a poorly timed or misaligned exit can be just as costly as a wrong investment.
Conclusion: Secondaries Offer Freedom—But Only If Used Wisely
Secondary private equity markets offer a powerful advantage: liquidity, portfolio reshaping, and opportunistic entries.
But they also demand surgical precision in evaluation and execution. For HNWIs and institutions, secondaries aren’t a backdoor—they’re a strategy. One that, if employed correctly, can compress timelines, enhance returns, and manage portfolio liquidity actively—without losing value unnecessarily.
At Growmont, we don’t just identify secondaries. We curate, structure, and navigate them—because in complex markets, expertise is liquidity too.
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