How to Start a Secondaries Fund Business
A public guide to the early planning, registration, and operating considerations for starting a Secondaries Fund business.
Secondaries Fund business overview
Before you start
Secondaries funds acquire limited partner interests in existing private equity, venture capital, and real assets funds from investors seeking early liquidity. The market has established demand and continues to expand. The strategy provides exposure to established portfolio companies without the longer time commitment of primary fund investments.
Revenue model
Profitability depends on pricing discipline, customer demand, and efficient operations. As acquired portfolio companies mature and distribute capital, funds capture distribution income and exit proceeds. The market has established demand and continues to expand. Additional revenue comes from advisory fees on GP-led secondary transactions and restructuring activities.
Operating requirements
Establishing a secondaries fund requires a varied investment range in initial capital, with most institutional funds operating at the higher end. Founders need demonstrated expertise in valuing LP interests, understanding fund economics, and negotiating secondary transactions with limited partners. Building relationships with major LP sellers—including pension funds, endowments, insurance companies, and family offices—is essential for sourcing deal flow. Legal and operational infrastructure for conducting fund valuations, managing LP interest transfers, and handling complex documentation is mandatory for regulatory compliance and investor confidence.
Plan your launch
Validate local customer demand, check required registrations and permits, and define the operations you need before committing resources.
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