GP-led and LP-led secondaries: Comparing two paths to liquidity in private markets

The global private equity (PE) secondary market has grown into a sophisticated and indispensable component of the private capital ecosystem. What began as a niche option for investors seeking liquidity has evolved into a mainstream channel for both limited partners (LP) and general partners (GP). 

At its core, the secondary market involves the buying and selling of existing commitments in PE funds—or, increasingly, the underlying portfolio assets themselves. Within this market, two primary forms of transactions dominate: LP-led secondaries and GP-led secondaries.

This article unpacks both, comparing their mechanics, motivations, and implications, while examining recent developments in Asia-Pacific (APAC), a region where secondary transactions remain underpenetrated but are now gathering momentum.

LP-led secondaries: The traditional route

In an LP-led secondary, an existing LP sells their interest in a fund to another buyer, typically a secondary fund. The buyer takes on the LP’s unfunded commitments and inherits the rights to future distributions.

Why LPs sell

• Portfolio rebalancing: Adjusting PE exposure across vintages, strategies, or geographies

• Liquidity needs: Meeting capital calls or freeing cash for new opportunities

• Regulatory changes: Compliance with mandates such as Solvency II

• Performance concerns: Exiting underperforming strategies early

Process and structure

Most LP-led deals are run as competitive auctions by intermediaries, with pricing determined by market demand. The buyer inherits the original fund terms and remaining duration.

Pros and cons

• Pros: Relatively fast exit, price discovery through auctions

• Cons: Often sold at a discount to net asset value (NAV)

GP-led secondaries: The alignment shift

In GP-led transactions, the GP initiates the process, typically transferring one or more assets from an existing fund into a continuation vehicle (CV). Instead of selling a passive fund stake, the transaction revolves around underlying portfolio companies.

Key structures

• Single-asset CVs: A single high-performing asset is spun out into a new vehicle.

• Multi-asset deals: A basket of assets is transferred.

• “Roll or sell’ election: LPs are given the option to sell their interest or roll into the CV. 

Why GPs initiate

• Extended hold periods: Keeping trophy assets beyond the original fund term.

• Value maximization: Unlocking further growth with new capital.

• Optional liquidity: Giving LPs a choice to cash out or stay invested.

Critical issues

GP-led deals potentially introduce conflicts of interest: The GP is both seller (on behalf of the old fund) and buyer (via the CV). To address this, robust LP advisory committee engagement is essential.

Comparative lens: LP-led vs. GP-led

Implications and market outlook

For LPs

• LP-led: Remains a useful tool for rebalancing and managing portfolio exposure.

• GP-led: Creates optional liquidity but requires due diligence on CV terms and valuation.

For GPs

GP-led secondaries are increasingly vital tools for lifecycle management, particularly to retain control over assets with long-term upside potential. 

Market trends

Globally, GP-led deals have surged, especially single-asset CVs. Secondary buyers are no longer passive price-takers—they are evolving into capital partners, providing flexible funding solutions to both LPs and GPs.

The APAC market: An untapped opportunity

While APAC is a significant hub for PE fundraising, it remains underrepresented in the global secondary market. 

Key data points:

• Market shares: APAC secondaries totaled to $3.4 billion in 2024, a historic low versus the $152 billion global volume 

• Recent uptick: APAC sellers made up 14% of global LP-led transactions in H1 2025, up from 8% in all of 2024

• GP-led share: Asia accounted for only 3% of global GP-led volumes in 2024

• Dry powder: Capital dedicated to Asian secondaries fell from 11% in 2020 to 5% in 2024

At the same time, secondaries have now overtaken IPOs and M&A as the largest exit channel in Asia, fueled by $1.5 trillion in unrealized assets, including $150 billion+ in over-aged funds.

What does this mean? With valuations correcting and capital still scarce, Asia has become a buyer’s market, ripe for secondary investors with dry powder.

The importance of a secondary ecosystem

For secondaries to thrive, APAC requires a deeper ecosystem:

• Specialized buyers willing to underwrite complex deals

• Advisors and intermediaries with regional expertise 

• LP participation, with active investors in Asia already highlighting the importance of fair, transparent processes that balance liquidity needs with long-term asset stewardship

"In APAC, we are definitely observing more and more LPs looking into their portfolios and assessing the opportunity costs of holding on to positions that may not necessarily fit their current investment views or preferences anymore, and would like to explore liquidity for such funds. However, many are first-time sellers, and the process can often be a daunting one, which is where advisors can come in handy, especially for potential transactions of meaningful size. For LPs looking to sell smaller positions however, it can be less economical for large secondaries funds and advisors to pursue. This is when a dedicated buyer for this segment becomes particularly helpful, and who is prepared to guide the seller through the transaction from the point of initial discussions to closing. That is what we at Bee Alternatives are doing to widen optionality available to LPs in APAC and create a deeper secondary ecosystem."

—Yue Han Chung, Vice President at Bee Alternatives

A more robust ecosystem can help normalize secondaries as a core liquidity solution, rather than an exception, across APAC. 

The secondary market is no longer a blackwater—it is central to the functioning of PE. While LP-led deals remain the bedrock, GP-led structures have redefined alignment and asset management. 

In APAC, the secondary market is still disproportionately small, but momentum is building. As LPs seek portfolio relief and GPs look for new ways to hold onto trophy assets, secondaries will become an increasingly critical pillar of the region’s private capital landscape.