3 days ago
Unlocking Liquidity: Private Market Secondaries And Family Offices
Evan J. Renov, Cofounder & Managing Partner at Arieli Group.
For family offices seeking liquidity, pricing efficiency and access to top-tier assets, the private secondary market has become an increasingly important part of the private capital ecosystem. In recent years, the private secondary market has quietly moved from the margins to the mainstream. As private markets become more efficient and act more like public markets, investments in secondaries are here to stay. Investing in secondaries can create liquidity for investors and, with a quicker timeline to exit, can also be less risky than early-stage investments.
Historically, the private secondary market presented meaningful barriers to entry for many investors, particularly family offices. Information asymmetry, complex transaction processes and a lack of standardized platforms meant access was largely reserved for those with deep networks and specialized legal and operational expertise. But over the past several years, those dynamics have fundamentally changed.
The rise of purpose-built private market platforms, supported by advances in artificial intelligence (AI), has improved market transparency, simplified legal complexities and made pricing discovery significantly more efficient. At my firm, we are backing this innovation with investments in private market platforms that are democratizing access to a once-exclusive asset class and positioning secondary investments as a key tool for portfolio diversification and liquidity management.
Notably, secondary transactions accounted for over 70% of venture capital exits in 2024 (paywall), a signal of the market's growing importance. For family offices managing long-term capital, secondaries offer something few asset classes can: the ability to access high-quality growth companies while retaining flexibility, optionality and shorter exit horizons. What's more, secondary markets function as an engine of liquidity.
Secondaries: Giving Family Offices A Pathway To Diversification
Family offices are often structured around long-term value creation and legacy-driven investment goals. With a growing share of capital tied up in long-horizon investments, even the most patient investors can face near-term liquidity constraints.
Secondary investments can help alleviate this tension. Traditional direct investments often require investors to enter at early stages and hold until IPO or acquisition, sometimes as long as a decade or more. In contrast, secondary transactions allow entry in later growth rounds with the potential to exit within a few years. This ability to enter and exit with greater precision allows family offices to reallocate capital more efficiently, support a broader range of opportunities and better manage exposure across sectors.
At the same time, many family offices continue to prioritize long-term impact and legacy. They are uniquely positioned to invest in breakthrough technologies in sectors such as healthcare and the life sciences, where clinical development can span many years, precisely because they are not constrained by short-term return expectations. Secondary investments, when used strategically, provide the liquidity needed to fund these long-horizon opportunities without sacrificing flexibility elsewhere in the portfolio. Liquidity also contributes to portfolio resilience and the ability for families to reinvest their capital in new, innovative opportunities.
Strategic Questions To Guide Private Secondary Market Participation
As family offices increasingly explore private market secondaries, thoughtful due diligence remains critical. Here are five strategic questions to consider when evaluating opportunities:
One of the advantages of the private secondary market is access to more mature companies with proven business models and clear paths to exit. While early-stage investments may offer higher potential upside, secondary transactions in later-stage companies reduce risk and allow for more targeted exposure. In many cases, early-stage participation is better suited to direct investments, while secondary strategies align more effectively with companies approaching exits.
Certain sectors lend themselves more naturally to secondary investments. Cybersecurity, for instance, is a fast-moving space with frequent merger and acquisition (M&A) activity and shorter timelines to liquidity. By contrast, industries like biotech, pharma and medtech that are critical for long-term impact often involve extended development cycles and are better aligned with longer-term, direct investment strategies.
In an era of increasing transparency, family offices have greater access than ever to data on company performance, capital structure and forward-looking plans. Between regulatory disclosures, industry research and AI-enabled diligence tools, investors can better assess whether a company is likely to pursue an IPO, attract acquisition interest or require additional funding. Understanding a company's trajectory is essential for determining timing and risk.
Every secondary deal is unique. Investors should evaluate whether they're purchasing shares directly from an existing shareholder or through intermediaries, and whether additional management fees or layers of ownership could dilute returns. A clear understanding of the deal structure, including rights, restrictions and timing, is essential for making informed decisions.
In the secondary market, investors are not only acquiring equity; they are positioning for a future event. Whether the goal is to hold until IPO, sell in a future secondary round or exit via strategic acquisition, having a defined path to liquidity is key. Even in shorter holding periods, investors should identify likely future buyers and evaluate overall market conditions that may support a timely and profitable exit.
Building A More Agile Portfolio
The future of private market investing is becoming more liquid, more data-driven and increasingly empowered by technology as innovation in investment platforms and operations continues to evolve. For family offices managing intergenerational capital, secondary investments may offer a valuable lever to balance long-term vision with near-term agility.
Whether used to unlock capital for new opportunities, manage concentration risk or achieve greater diversification, private market secondaries are increasingly becoming a strategic imperative, not just an opportunistic allocation. As infrastructure continues to improve and market acceptance deepens, the opportunity set for family offices will only expand.
Those prepared to embrace the private secondary market thoughtfully and strategically may find themselves well-positioned financially and on the path toward a greater mission of creating enduring prosperity.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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