Abstract:
In this paper we will describe the secondary market for private equity. The private equity market is increasing rapidly. In the private equity secondary market, the sellers sell their investments in the funds as well as their commitment to private equity. Some big companies like, Lexington Partners, AlpInvest Partners, Landmark Partners, have participated in the private equity secondary market.
The private equity secondary market, sometimes referred as private equity secondaries, is a market where the trading of private equity takes place. Traditionally, a small number of buyers has been the key player in this market for a long time, but, now a days, this number is increasing.
Private equity is an equity capital which is available for the investors and firms but not listed in the stock market. It refers to any kind of equity securities which are not owned by the public as well as not quoted on a stock exchange. Private equity is now treated as an asset of institutional class.
Generally, the asset class of private equity is not liquid. It refers to long term investment by the equity investors. However, no public market is listed for the increasing demand of private equity investments, but the availability of a robust secondary market makes the trading of private equity investments easy.
The private equity secondary market also refers the investors commitment to the private equity. The sellers sell both their commitments to private equity and investments into the fund.
Participants of the Private Equity Secondary Market:
Big investment firms like, HarbourVest Partners, Lexington Partners, AlpInvest Partners, Landmark Partners, Coller Capital etc, have already entered into the secondary market. Some small firms like, Pomona Capital, Pantheon Ventures, Adams Street Partners, Paul Capital, Newbury Partners have recently entered into the private equity secondary market.
In addition to that, some big investment banking companies like, Lehman Brothers, Credit Suisse, Goldman Sachs and Deutsche Bank have initiated their investment programs.