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The secondaries market has grown so large now that its investors need an exit. Enter tertiary funds—the latest sign that PE's liquidity issues run deeper than anyone wants to admit.
Tertiary funds are essentially "secondaries of secondaries" that acquire interests in secondary PE funds. While the strategy remains niche, some players are growing quickly.
London-based Netley Capital, which focuses exclusively on tertiary investing, has more than doubled its deployable capital to $825 million in April, up from $315 million at its launch in September.
France-based Bex Capital held a $765 million final close for its fifth fund in 2024, hitting its target within four months. Fund V is dedicated to fund-of-funds secondaries and makes investments ranging from $5 million to $1 billion.
In the US, Michigan-based Sturbridge Capital, which buys LP interests in FoFs, secondary funds and tail-end funds, closed its Diversified Private Equity Fund III at $288 million in 2024.
"The secondary market has now got so big that LPs in secondary funds need liquidity sometimes too, and that can be for a whole host of reasons," said Robert Perry, partner and co-founder at Netley Capital. "If you could come across a use case for the secondary market in the old side of things, you can apply that use case completely equally to what we do in the tertiary space."
I'm Emily Lai, and this is The Weekend Pitch. You can reach me at emily.lai@pitchbook.com or on LinkedIn.
Given these overlapping use cases, the strategy also faces many of the same concerns long associated with secondaries.
As with primary PE funds, secondaries and tertiary funds also charge their own management fees and carry, so investors in tertiary funds will be investing in the same underlying assets with two extra layers of fees. |
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| Put your brand in front of private market decision makers |
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PE exit value in European B2B defied a broader, sluggish PE exit environment in Q1, doubling over the last quarter. While deals are getting bigger, the volume is shrinking, with exit count for the sector dropping below 100 for the first time in five years. Still, the vertical is on track to double its exit value from the last year. How much PE exit value did European B2B generate in Q1?
A) €43 billion
B) €29.7 billion
C) €56.1 billion
D) €36.5 billion
Find your answer at the bottom of The Weekend Pitch! |
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A selection from our most-read articles of the past few days.
- Garage doors are PE's latest HVAC-style rollup obsession. With 26 deals in 2025 and an $800M platform acquisition priced like a software business, the trades are officially a blue-chip play. Learn more
- Employees at the most valuable private companies approaching IPOs are increasingly declining to sell into tender offers worth billions of dollars, even as investor demand to buy their shares far outstrips what’s available. See why
- Software company Medallia is likely going to be taken over by its private credit lenders after months of markdowns in private credit funds and suggestions that restructuring was likely. Read more
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“If you’re a smaller issuer, you want to get out before that truck comes through. No one knows how much money is going to be left on the table. We’re talking about the biggest IPOs in the history of mankind.”
—-Steve Brotman, managing partner at Alpha Partners, a late-stage investment firm, talking about the potential rush of companies going public before SpaceX does. You can read more about the IPO landscape in Michael Bodley and Kia Kokalitcheva’s latest reporting here. |
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Answer: D
In Q1 European B2B saw €36.5 billion in PE exit value. That makes Q1 2026 the best-performing quarter in five years. You can read more about what’s behind the rise in exit value by reading Emily Lai’s latest here. |
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This edition of The Weekend Pitch was written by Emily Lai and Jacob Robbins. It was edited by Andrew Woodman and Michael Bruning.
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