GP-Led and LP-Led Secondaries: Comparing Two Paths to Liquidity (APAC)

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

Author:
Josephine Koh

Published date:
June 3, 2026

Unpack GP-led vs. LP-led secondaries—the two paths to private equity liquidity. Explore transaction mechanics, risks, and the booming opportunity in the APAC secondary market.

Contents

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

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

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

Why GPs initiate

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
Feature LP-led secondaries GP-led secondaries
Initiator Limited partner General partner
Primary focus Fund stake Underlying assets
Liquidity provided to Selling LPs All LPs (sell or roll)
New investor Inherits old fund terms Invests in continuation vehicle
GP involvement Minimal High
Key risk Discount to NAV Valuation conflicts

Implications and market outlook

For LPs

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:

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:

"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.

Josephine Koh is the Senior Director of Customer Experience, Funds for Asia Pacific, Middle East & Africa at Carta, and has over 20 years of experience in the asset management industry. She was an integral member of the international expansion team when Carta launched its first international office in 2021, building the fund administration book of business. Prior to joining Carta, she was the co-founder and COO at Insignia Venture Partners.