Research On Private Equity Secondaries Structure And Pricing Idea

Private equity secondaries refer to the market where private equity aretraded. It is playing a more and more important role in the development ofthe whole industry. Although the private equity secondaries already existsfor years, direct secondaries, the transactions market of portfolios hold byprivate equity funds, is new to academic research and there is fewliterature focusing on this area. Moreover, none research on the interactioneffect between two markets (PE primary and secondary market) can befound.In this paper, the influence factors on both buying and selling sides ofdirect secondaries are analyzed. It is concluded that the existence of theprivate equity secondary market will help the private primary markets tofind the enterprise value in the conclusion, which answered the questionwhy the private equity secondary market should be existence and whatrelated factors influencing the market. Even more, it is very useful totransaction pricing decision of actual operation.The main content of this article includes the history and backgroundof the private equity secondary market, market structure, the drivingfactors and the reaction between primary and secondary market of primaryequity as a summary.