A booming market for secondaries

With valuations down from where they were a couple of years ago, the exit horizons that investors had in mind when they made their original investment ended up being further away than they thought. The IPOs are still scarce, and M&As are still too few and far between, but investors still want exits.

The result has been an increase in CVCs selling stakes in portfolio companies, sometimes their whole stakes and sometimes just partial, in order to manage their liquidity and get some more money on board.

I’m happy to have GCV’s deputy editor Kim Moore back on the show to talk about a booming secondaries market, which is expected to reach $180bn by the end of this year, representing a 20-year high.

Kim’s article explores the institutional investors that are seeing record quarterly activity buying up these secondaries, as well as the narrowing gap between the prices sought by buyers and sellers, how there is a huge amount of capital out there just waiting to be invested in these stakes, and how GP-LP structure are the most conducive to secondaries activity.

Secondary market sales of venture investments at 20-year high as liquidity drops

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