Asset-Level Secondaries for LPs
James McGillicuddy, head of strategy at Carta, on building an issuer-centric platform and investing in secondaries
This points to a new way large investors get more exposure without forcing the main fund to get bigger. When a venture firm has already filled its position in a late stage company, it can set up a separate secondary or direct vehicle for its own LPs to buy more of that one asset. That keeps the GP in control of access and diligence, while giving LPs company specific exposure instead of only broad fund exposure.
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In practice, the manager is saying, this core fund already owns enough, but there is still demand for this one company. So the firm creates an SPV, side fund, or dedicated secondary sleeve, and trusted LPs invest through that vehicle rather than through the flagship fund.
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This structure solves a real bottleneck in late stage venture. Access matters more than capital. Once a manager is already on the cap table, it is much easier to source secondary blocks and get company approval, which is why outside investors often try to partner with existing holders rather than come in cold.
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It also reduces conflict with the GP's main fund strategy. The flagship can stay at its target size and ownership model, while the side vehicle lets LPs co invest in a single winner. That is cleaner than simply raising a much larger fund and risking style drift.
The next step is a more layered private market, where flagship funds, SPVs, and tender programs sit beside each other. As private companies stay private longer and liquidity becomes more routine, more asset managers will package single company exposure for LPs, and platforms that make those vehicles easy to form and administer will capture more of the market.