GP-Led, the engine of the secondary private equity market | Analysis by Estelle Dolla

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Estelle Dolla, President of Private Corner, recently joined BSmart 4Change to provide an expert perspective on the evolution of the private equity secondary market, highlighting in particular the pivotal role of GP-led transactions.

What is a GP-Led Transaction?

The term GP-led refers to a specific category of secondary transactions, distinct from the more traditional LP-led deals. To recall:

• LP (Limited Partners) – investors in the fund
• GP (General Partners) – fund managers

A GP-led transaction typically involves a fund manager orchestrating the transfer of a portfolio company held in an existing fund into a newly created continuation vehicle. This structure enables the GP to extend its stewardship of the company while providing investors in the original fund with a choice: either to exit and crystallize their gains, or to reinvest alongside the manager in the new vehicle.

This mechanism contrasts with traditional exit routes in private equity—such as trade sales, secondary buyouts, or IPOs—by offering what can be described as a “second life” for the asset. Investors benefit from the flexibility to either monetize their position or maintain exposure to the company’s future value creation under the continued leadership of the GP.

What is the secondary market in private equity?

Emerging in the late 1990s, the private equity secondary market has now become a mature pillar of alternative asset management. It allows investors to access diversified portfolios of private assets already deployed, often at a discount, thereby offering a pragmatic and transparent entry point into the asset class.

Asset quality and vigilance

GP-led transactions can encompass assets of exceptional quality with strong upside potential, but also situations where the fundamentals are more uncertain. This duality demands heightened vigilance from wealth managers and advisers, particularly in terms of valuation integrity and governance safeguards. Key success factors include ensuring alignment of interest between GP and LPs, and the involvement of independent third parties to validate valuations and reinforce investor confidence.

A rapidly growing secondary market

The secondary market has been experiencing sustained growth. In 2024, it represented €162 billion globally, of which €75 billion stemmed from GP-led transactions in Europe—a 173% increase compared to 2019. This acceleration reflects both the maturity of the primary private equity market and structural shifts in exit dynamics, such as the complexity of trade sales and more cautious IPO conditions.

The importance of trust

One of the unique advantages of GP-led transactions is that they often involve companies already well known to existing investors, who may thus choose to embark on a renewed phase of investment. Trust in the GP is therefore paramount, built on transparency, long-term monitoring of the asset, and the consistency of the manager’s strategy.

Private Corner’s Approach

For over five years, Private Corner has supported wealth managers, family offices, and private banks in navigating this space by:

• Identifying and selecting top-tier managers
• Providing transparent information and market intelligence
• Equipping investors with the educational tools required to integrate private equity into a holistic wealth management strategy

Private Corner has made the private equity secondary market a cornerstone of its approach, given its unique ability to combine long-term wealth creation with selectivity in both managers and underlying assets. Its mission is to deliver modular, robust, and tailored solutions that meet the diverse profiles and objectives of investors.