One issue is asymmetry of information and experience, another the recutting of terms
Once upon a time, in the jargon of private equity, a “secondary” would have meant one master of the universe selling to another. Now, it could easily refer to a buyout fund flogging assets to itself.
In the twilight years of the pre-crisis credit boom, the growth of secondary buyouts prompted concerns about dwindling investment opportunities, ailing returns and valuations detached from the strictures of public markets.
The theory is that investors get more flexibility. Funds get to capture the remaining upside in what are usually presented as prize assets, rather than handing it over to someone else.
Read more: FT
