Checklist For Purchasing Private Equity Fund Interests On Secondary Markets

Institutional investors have increasingly traded in interests in private equity funds over the past few years. The horizon for private equity fund investments is typically long: the invested capital may remain committed to the fund for as long as ten years, and often the investment cannot be redeemed during that period.

As trading in fund interests has become more active, investors have had better opportunities to realise their private equity fund investments prior to the expiry of the fund's term. This has made private equity fund investments easier and quicker to liquidate. Active secondary markets also offer interesting investment opportunities to buyers such as private equity funds specialising in secondary markets (called secondary funds).