The PE secondary market is still a strange concept in China, which mainly refers to buying the corresponding private equity from the existing LP(LP means limited partner), and also includes buying part or all of the portfolio of private equity funds from GP(GP means general partner). The significance of the emergence of the secondary market is to meet the liquidity needs of existing investors, and it is a new exit channel for PE funds.
In addition, in the field of real estate financial market in developed countries such as Europe and America, when talking about the secondary market, it can also refer to the market where mortgage guarantee banks sell mortgage claims to investors. For example, two mortgage companies, Fannie Mae and Freddie Mac (hereinafter referred to as Fannie Mae and Freddie Mac), which became the focus of global attention in the subprime mortgage crisis in the United States, bought and sold the issued mortgage creditor's rights, and the trading market they formed was the secondary market of the issued creditor's rights.
For private placement, the so-called "secondary market" refers to the trading behavior of LP of private placement fund to sell its capital contribution share and unfunded commitment to other investors. At the same time, under the management and operation of GP, private equity funds will sell the rights and interests invested in one, several or even all invested enterprises to other investors, which is also a transaction type of private equity secondary market.