GP-Led Secondary

What Is a GP-Led Secondary?

A GP-led secondary is a transaction in which a private equity fund’s general partner initiates and structures the sale or transfer of portfolio assets on the secondary market. Unlike traditional LP-led secondaries — where a limited partner sells its fund interest to a secondary buyer — GP-led transactions are driven by the fund manager and involve the restructuring of existing fund assets into new vehicles or the sale of partial interests to incoming investors.

GP-led secondaries have transformed from a marginal corner of the secondary market into one of its most dynamic and rapidly growing segments. According to Bain & Company’s Global Private Equity Report, GP-led transactions accounted for roughly half of all global secondary market volume by 2024, up from less than 10% a decade earlier. This growth reflects a fundamental recognition that the traditional private equity model — a fixed fund life with binary exit options (sell or IPO) — does not always serve the interests of GPs, LPs, or portfolio companies. GP-led secondaries provide a flexible middle path, allowing fund managers to manage liquidity, extend hold periods, and optimise exit timing without the constraints of the legacy fund structure.

The most common form of GP-led secondary is the continuation fund, but the category encompasses a broader range of transaction types, each with distinct mechanics and use cases.

How GP-Led Secondaries Work

Transaction Types

GP-led secondaries fall into several categories:

Continuation funds (single-asset). The GP transfers a single portfolio company from an existing fund into a newly created continuation vehicle. This is the most prevalent GP-led structure, accounting for the majority of transaction volume. Existing LPs choose between cashing out at a negotiated price or rolling their interest into the new vehicle. A lead secondary investor anchors the continuation fund with fresh capital.

Continuation funds (multi-asset). The GP transfers multiple portfolio companies — sometimes the entire remaining portfolio of a legacy fund — into a single continuation vehicle. Multi-asset CVs are more complex to execute, as the secondary buyer must underwrite several companies simultaneously, but they allow the GP to provide comprehensive liquidity across the fund.

Tender offers. The GP facilitates a process in which a secondary buyer offers to purchase LP interests in an existing fund at a specified price. Unlike a continuation fund, the underlying fund structure remains unchanged — the secondary buyer simply replaces selling LPs as investors. Tender offers are less disruptive structurally but do not provide the GP with new capital or a reset carry structure.

Strip sales. The GP sells a partial interest (a “strip”) in one or more portfolio companies to a secondary buyer or co-investor. The GP retains the majority of the economic interest and continues to manage the asset. Strip sales provide partial liquidity and are often used to de-risk concentrated positions or fund follow-on investments.

Preferred equity solutions. A secondary investor provides preferred equity capital to an existing fund, typically in exchange for a priority return and a share of the upside. This structure allows the GP to return capital to LPs or fund new investments without transferring ownership of portfolio assets.

The Process

A GP-led secondary transaction follows a structured process:

Stage	Activities	Timeline
Preparation	GP engages secondary advisor; identifies assets; prepares marketing materials	2–4 weeks
Marketing	Advisor contacts secondary buyers; distributes information memorandum; manages data room	4–6 weeks
Bidding	Secondary buyers submit indicative offers; GP selects shortlist	2–3 weeks
Due diligence	Shortlisted buyers conduct detailed diligence on the asset(s)	4–8 weeks
Lead investor selection	GP selects lead investor; negotiates price and CV terms	2–4 weeks
LP election	Existing LPs elect to cash out, roll over, or partially roll	3–4 weeks
Closing	Legal documentation; funding; asset transfer	2–4 weeks

The end-to-end process typically takes four to six months, though complex multi-asset transactions can extend beyond that.

Pricing and Valuation

Pricing in GP-led secondaries is determined through a combination of:

• GP’s internal valuation — the starting point, based on the GP’s assessment of the asset’s fair market value
• Competitive secondary market process — bids from multiple secondary buyers provide market-tested price discovery
• Independent valuation or fairness opinion — often required by the LP advisory committee to validate the price
• LP election dynamics — the proportion of LPs choosing to roll versus cash out affects the capital required and can influence pricing

Pricing is typically expressed as a percentage of the GP’s most recent net asset value (NAV). Continuation fund transactions for high-quality, single-asset deals have traded at or above 100% of NAV in strong markets, though discounts of 5–15% are common for multi-asset vehicles or less proven assets.

GP-Led Secondaries in Practice

Benefits for Each Stakeholder

For GPs:

• Additional time to execute value creation plans
• Fresh capital for growth initiatives or add-on acquisitions
• Carry crystallisation on legacy fund performance
• Demonstrated conviction in portfolio assets (positive fundraising signal)

For existing LPs:

• Liquidity option at a market-validated price
• Choice to maintain exposure by rolling into the continuation vehicle
• Resolution of “zombie fund” or tail-end portfolio issues

For secondary buyers:

• Access to assets with known performance histories and identified upside
• GP alignment (the GP continues to manage with a fresh carry structure)
• Shorter hold periods compared to primary fund commitments
• Reduced blind-pool risk — buyers can underwrite specific assets

Conflicts and Governance

GP-led secondaries present inherent conflicts that require careful management. The GP acts simultaneously as the seller’s agent (managing the legacy fund for LPs) and as the buyer’s partner (structuring and managing the continuation vehicle). Best practices include:

• LPAC approval — the legacy fund’s LP advisory committee must review and approve the transaction
• Competitive process — a properly run auction among secondary buyers ensures market pricing
• Full transparency — comprehensive disclosure of the GP’s economic interest, the business plan, and all material terms
• Independent advice — LPs should have access to independent counsel and, ideally, their own valuation analysis
• Stapled commitments — requiring the GP to co-invest meaningfully in the continuation vehicle to align interests

Connection to Continuation Funds

Continuation funds are the most prominent subset of GP-led secondaries, but the terms are not synonymous. A GP-led secondary is the broader category — any secondary transaction initiated by the GP. A continuation fund is a specific structure within that category. Strip sales, tender offers, and preferred equity solutions are also GP-led secondaries but are not continuation funds. In practice, the terms are often used interchangeably in market commentary, which can create confusion. Precision matters when evaluating specific transaction proposals.

Asia Pacific Market Development

The GP-led secondary market in Asia Pacific is following the trajectory established in North America and Europe, with a lag of roughly three to five years. Key developments include:

Growing transaction volume. As the first wave of dedicated APAC PE funds reaches maturity — part of the broader APAC private equity trends — GP-led secondary activity is increasing. Funds raised in the 2012–2016 vintage years are now in their extension periods, and many GPs are evaluating continuation structures for their strongest remaining assets.

Secondary buyer appetite. Global secondary specialists — Ardian, Lexington Partners, Coller Capital, and others — have expanded their Asia Pacific teams and mandates, with Singapore emerging as a key hub (see private equity firms in Singapore). Dedicated APAC secondary funds have also launched, providing local expertise and capital for GP-led transactions in the region.

Regulatory considerations. Cross-border GP-led secondaries in APAC must navigate diverse regulatory environments. Transfer restrictions, foreign investment approvals, and tax implications vary significantly across jurisdictions — from the relatively straightforward regimes of Singapore and Hong Kong to the more complex requirements of India, China, and Indonesia.

Structural preferences. Single-asset continuation funds are currently the dominant GP-led structure in APAC, mirroring the global trend. As the market matures, multi-asset vehicles and other structures are expected to gain traction.

Amafi provides the analytical infrastructure that GPs, secondary buyers, and LPs need to evaluate GP-led secondary opportunities across Asia Pacific — from asset-level performance data to market-validated pricing benchmarks.

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Exploring M&A opportunities in Asia Pacific? Amafi helps investors access and evaluate GP-led secondary transactions across the region, connecting capital with experienced fund managers and high-quality portfolio assets.