A GP-led secondary is a transaction initiated by the general partner to restructure the holdings of an existing fund. Unlike a traditional LP-led secondary, where an individual limited partner sells its fund interest to a buyer on the secondary market, a GP-led secondary is driven by the fund manager and typically involves moving assets into a new vehicle.
Why It Matters
GP-led secondaries have become one of the most active segments of the private markets. They give GPs a tool to manage fund timelines, provide liquidity to LPs who want it, and retain high-conviction assets that would otherwise need to be sold at fund expiration. For LPs, the transaction offers a defined decision point with real options rather than a forced outcome.
Key Details
- The GP drives the process, selecting assets to transfer and engaging secondary buyers for pricing and capital commitments.
- Assets typically move into a continuation vehicle with new terms and a fresh investment horizon.
- Secondary buyers provide the capital that funds the cash-out for LPs who choose to sell their interest.
- Existing LPs receive an election notice with disclosure materials and a defined window to choose between selling or rolling into the new vehicle.
- In an LP-led secondary, the LP sells its fund interest to a third party. In a GP-led secondary, the GP restructures the fund itself.
For a full overview, see the Continuation Vehicles guide.
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