Ace the Evercore PCA First Round 2026 – Launch Your Private Capital Career with Confidence!

In the context of private equity, a secondary transaction refers to the purchasing and selling of existing fund interests among investors. This process allows original investors in a private equity fund to sell their stakes to other investors, typically when they are looking to liquidate or adjust their portfolios without waiting for the fund to reach its maturity. Secondary transactions provide liquidity to investors in illiquid private equity markets, allowing them to realize gains or mitigate losses by transferring their interests to new buyers.

The other choices relate to different concepts. Creating new private equity fund interests pertains to capital raising for new funds, which does not involve the existing stakes of current investors. Liquidating a private equity fund entirely refers to winding down the fund and distributing remaining assets, which is a final step rather than a transaction between parties. Investing in venture capital startups, while a segment of private equity, does not fit the definition of secondary transactions since it involves making new investments rather than trading existing interests.