Secondary funds emerge as vital bridge in India’s maturing private capital market

Globally, secondaries have grown into a mainstream asset class.

As India’s venture capital and private equity ecosystem matures, specialised secondary funds are emerging as critical bridges between investors seeking exits and those wanting longer exposure to high-quality assets.

With fund cycles nearing maturity, delayed initial public offer (IPO) timelines, and growing distribution pressure on general partners (GPs), these funds are increasingly stepping in to provide liquidity and continuity.

“Venture capital funds, growth funds and private equity funds have all stayed true to their lanes. But who’s building the bridges between them? That’s where secondaries come in,” said Rohit Bhayana, Co-founder and Co-CEO of Oister Global, which recently launched the ACE Fund — a $500 million vehicle aimed at secondary transactions and continuation structures.

“Oister’s ACE Fund is designed precisely to fill this gap,” Bhayana added.

“We are creating both continuation vehicles and dedicated secondaries funds under ACE, enabling liquidity solutions across VC and PE portfolios. GPs get flexibility for longer structures, LPs get liquidity optionality — whether to stay in or cash out — and founders get the chance to reconstruct their cap table.”

Mainstream asset

Globally, secondaries have grown into a mainstream asset class. According to Bhayana, “secondary funds’ AUM has grown at a 20 per cent CAGR over the last decade versus 12-13 per cent for overall PE funds. Over $580 billion has been raised worldwide in the secondaries asset class over the last 15 years. India alone is looking at substantial growth over the next three to four years.”

Even valuations are stabilising. “Globally, secondaries are typically at a 10 per cent discount to NAV. But when a company shows strong revenue visibility and margin strength, there’s no reason it can’t transact at a premium,” he said.

Rahul Jain, president and head of Nuvama Wealth, said the appetite for co-investment and selective stake purchases is rising among high-net-worth clients.

“We take co-investment opportunities for large clients alongside fund managers — only for specialised investors who understand the risk and have the capacity to invest,” he said. “If I’m holding ₹100 of stock and want to offload ₹2-3 worth, that works well. The investor gets access, and the fund books liquidity.”

Potential deals

Vinay Rao, partner at Ventureast, said the momentum is visible across early and late-stage markets. “We are seeing a significant increase in interest from secondary funds to evaluate portfolios for potential deals,” he said.

“Liquidity pressure for funds at end-of-life and DPI requirements for GPs trying to raise subsequent new funds are creating a strong supply of secondary shares.”

Rao added that more specialist secondary funds are emerging as India reaches an “inflection point”, with over 800 late-stage tech companies poised for IPOs. “We’re also witnessing the rise of opportunity funds — vehicles designed by VCs to double down on proven winners within existing portfolios,” he said.

As funds age and investors seek faster liquidity, secondaries are expected to become an integral part of India’s private capital stack.

“The opportunity is large,” Bhayana said. “As funds age and the need to deliver DPI grows, secondaries will be a defining pillar of India’s next phase of private market evolution.”

Published on October 24, 2025