Unlocking Value: The Rise of Secondaries in Private Markets

When IBM chairman Thomas Watson was selected to serve as ambassador to the USSR in 1979, he had a problem. Ethics norms of the time dictated he needed to dispose of his personal stakes in several VC funds he’d accumulated over years of investing in the early computing industry. Watson tapped Dayton Carr to help market the fund interests. After significant effort, Carr found willing buyers in the nascent private markets ecosystem to complete the sales. This convinced Carr to set up the world’s first dedicated secondaries firm, Venture Capital Fund of America, to pursue the strategy full-time.

The industry Carr helped birth more than four decades ago has spread across every major private market asset class and transacted more than $112B of volume in 2023. Secondaries have become an increasingly important arrow in the quiver of private market allocations available to investors, whether because of competitive returns, diversification, or quicker cash conversion cycles.

We believe now is a particularly advantageous time to tap the secondaries markets with discounts to net asset value above pre-COVID averages across asset classes and even further above average in more niche spaces like venture. To that end, we’ve taken steps to bring high-quality secondaries opportunities to our member community.

I’ve put together a primer on the history of secondaries, different segments that have evolved, and what the data indicates about performance. I invite you to have a read and let me know what you think.

-Charles Patton, Director, Investments

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Worth a Read

Applying Public Market Principles to Private Markets

Many of the same common sense principles for crafting a balanced portfolio that performs over the long term apply across both public and private. Read More

Making Secondaries Primary

We expect to see investors of all sizes deploy more capital into secondaries. Explore our primer on the category’s history, segments, and performance. Read More