Secondary Buyout
Private Credit glossary · Private Credit Fundamentals
Definition
Sale of a portfolio company from one PE fund to another.
Secondary Buyout in plain English
A private equity (PE) firm is an investment company that buys whole businesses, tries to make them more valuable over a few years, then sells them for a profit. A "secondary buyout" is simply when one PE firm sells a company it owns directly to another PE firm — instead of selling it to the public stock market or to a competitor. It's like a house-flipper selling a renovated home to another house-flipper who thinks they can add even more value. The word "secondary" just signals it's the second (or later) time a PE firm has owned that same business.
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