What is a 'secondaries market' in relation to private capital?

The secondaries market in the context of private capital pertains specifically to a platform for selling stakes in private equity funds. This market allows existing investors to sell their interests in private equity funds to other investors. It plays a critical role in providing liquidity for investors who may wish to exit their positions before the fund's maturity or capital realization, which typically occurs many years down the line.

By facilitating these transactions, the secondaries market contributes to the overall efficiency and attraction of private equity investments, as it creates opportunities for both buyers looking for discounted entry points and sellers seeking to reduce exposure or generate cash. This distinct focus on private equity fund stakes differentiates the secondaries market from other types of markets, such as those for public companies, government securities, or direct investments into startups.