Access Drives Alpha in Secondaries
James McGillicuddy, head of strategy at Carta, on building an issuer-centric platform and investing in secondaries
The strategic fight in private secondaries is really about who owns access, not who has the smartest pricing model. In a brokered market, investors can win by finding sellers before others do and by knowing more than the next buyer. In an issuer controlled model like CartaX, that edge shifts toward investors who already have trusted relationships with the company, because the company decides who gets into the process and what information is shared.
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Traditional secondaries are still mostly opaque, broker driven, and off platform. In that setup, buyers spend time chasing blocks, comparing partial information, and negotiating around transfer rules. That is where information asymmetry creates alpha, because access itself is scarce and uneven.
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Issuer centric platforms change the workflow. Instead of cold calling employees and investors, a buyer tries to become a known, trusted shareholder the company is willing to invite into a tender or auction. That favors multi stage funds and specialist secondaries investors that build company relationships early.
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This is why many later stage firms do primaries as well as secondaries. Getting onto the cap table early can secure information flow, pro rata rights, and future access to secondary blocks. The scarce asset is often not price insight alone, but permission to participate at all.
Over time, alpha should move away from pure opacity and toward relationship, selection, and speed. As private companies run more structured liquidity events and cap table systems become the system of record for share transfers, the investors that win will be the ones companies trust to provide repeat liquidity without creating noise on the cap table.