PEINVEST
Invest through secondary fund managers (Coller, Lexington, etc.) for professional management and diversification.
Difficulty
Beginner
Risk Level
Medium
Min. Investment
$50,000+
Time Horizon
5-7 years
Secondary Fund Allocation is the most accessible way to gain exposure to LP secondary investments. Instead of purchasing individual LP interests, you invest in funds managed by professional secondary specialists who aggregate capital and deploy across many opportunities. This approach provides instant diversification, professional underwriting, and access to deal flow that individual investors cannot reach directly.
| Tier | Managers | Typical Fund Size |
|---|---|---|
| Mega Funds | Lexington Partners, Coller Capital, Ardian | $10-20B+ |
| Large Funds | HarbourVest, Strategic Partners (Blackstone) | $5-10B |
| Mid-Market | Pantheon, Adams Street, Neuberger Berman | $2-5B |
| Specialists | Industry Ventures (VC focus), Whitehorse (GP stakes) | $500M-2B |
| Access Method | Typical Minimum | Fee Structure |
|---|---|---|
| Direct Investment | $5M-25M+ | Base: 1.0-1.5%, Carry: 15-20% |
| Moonfare (Platform) | €50K (~$55K) | Base + 0.5-0.75% platform fee |
| CAIS (via Advisor) | $100K+ | Base + advisor fee |
| iCapital Network | $100K+ | Base + platform fee |
| Fund-of-Funds | $50K-100K | Additional layer of fees |
| Performance Quartile | Net IRR Range | Net TVPI |
|---|---|---|
| Top Quartile | 15-20%+ | 1.6-2.0x+ |
| Second Quartile | 12-15% | 1.4-1.6x |
| Third Quartile | 8-12% | 1.2-1.4x |
| Bottom Quartile | 5-8% | 1.0-1.2x |
Secondary funds have historically shown lower loss ratios, more predictable return patterns, and shorter holding periods compared to primary funds.
Risk Warning
This is for educational purposes only. Private equity investments are highly speculative and illiquid. Consult a qualified financial advisor before making any investment decisions.
Secondary funds offer professional management, instant diversification across hundreds of underlying companies, access to top-tier managers, lower minimums ($50K vs $500K+), and reduced due diligence burden on the individual investor.
Expect base management fees of 1.0-1.5% plus carried interest of 15-20%. Platform access may add 0.5-0.75% additional fees. Total fee drag is higher than direct investments but includes professional management and diversification.
Top quartile secondary funds historically deliver 15-20%+ net IRR with 1.6-2.0x net TVPI. Median performers target 12-15% IRR. Secondary funds typically show lower loss ratios and more predictable returns than primary funds.