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Secondary Private Equity Funds: The Perfect Storm

By Hope Vaughn and Ross Barrett
April 01, 2003

The recent growth and maturity of the private equity market has generated significant secondary market opportunities. In a maturing private equity industry, the secondary market has become increasingly viewed as a tool for private equity portfolio management and a source of liquidity, in a relatively illiquid market.

Historically, approximately 2-3% of all private equity commitments turn over in the secondary market. Over $860 billion of private equity was raised from 1997-2002 (VentureEconomics). Based on this data, Landmark Partners, a dedicated secondary investor, estimates the volume of secondary activity generated from these commitments to approach $22 billion or approximately $2 billion annually over the next decade.

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