Secondary Sale (LP)
Private Equity glossary · Private Equity Fundamentals
Definition
Sale of an LP's fund interest to another investor, allowing early exit from an illiquid fund commitment.
Secondary Sale (LP) in plain English
When you commit money to a PE fund, it's tied up for years and you normally can't ask for it back. An LP (limited partner — an outside investor in the fund, like a pension fund) can instead SELL its stake to another investor to get cash out early. It's the financial version of selling your gym membership to someone else so you're off the hook — you get paid now, and the buyer takes over your spot and its future payoffs.
Also called: LP
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