PRIVATE EQUITY IS A LONG-TERM INVESTMENT — until it’s not. For investors who wish to do things like reduce the number of managers in a portfolio or move money into more-mainstream assets, there’s no longer a stigma around shedding private equity holdings. It’s easy to see why some people might seek to escape deals with private equity funds, which typically lock up capital and require annual commitments for a set period. These funds don’t trade publicly, so an informal secondary market has evolved in which investors sell their stakes rather than wait out contracts that can last as long as ten years.

“In the past, investors wanted to be discreet about selling private equity stakes, as they thought it might signal that they were distressed,” says Benoît Verbrugghe, New York–based head of AXA Private Equity for North America, which manages $17 billion in primary and secondary funds of funds. “It’s not taboo anymore.”

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