The burgeoning private-equity secondaries market is set to get its buttonwood tree.
The Nasdaq OMX Group plans to launch a private market on which p.e. investors can sell their stakes, with Kohlberg Kravis Roberts the first to sign up. Others are expected to follow before the market debuts, probably in the second half at the earliest, with several in talks with Nasdaq.
The new market will allow investors to sell some or all of their stakes in p.e. funds. KKR is expected to file paperwork to allow fractional trading as soon as this month, The Wall Street Journal reports.
The secondary p.e. market was already poised for its biggest year ever, with deal volume expected to top $30 billion. The week, Ardian, the former AXA Private Equity, announced it had raised the largest fund of p.e. funds in history, with $9 billion of the $10 billion garnered earmarked for secondary investments.
Buyers on the new market will have to be accredited. But rather than handing over millions to a newly-raised p.e. fund, with a lockup that can reach a decade, participants could have the option to pay just a few tens of thousands of dollars for a piece of a fund stake. And sales could come with as little as one month’s notice.
It remains unclear whether investors will be permitted to trade shares of all KKR funds, or just certain vehicles selected by the firm. And the market requires regulatory approval.