I was just reading this article about the secondaries market booming. LPs are trading fund positions at record levels, looking for liquidity in a world where exits are slow. On one level, this is good, it creates liquidity in the system. But for portfolio companies, it raises the stakes. Why? Because every time a fund position trades, new eyes are on your numbers, and those buyers are more skeptical than ever.
They’re not looking at glossy pitch decks. They’re combing through data rooms. As CFO, you need to assume your company could be reviewed by a new investor at any moment. That means reporting needs to be tight, KPIs need to be relevant, and cash flow consistent. If your numbers are sloppy or weak, you’ll be discounted in the trade. If they’re clean and reliable, you’ll be valued fairly or even at a premium.
What’s the takeaway here? In a booming secondaries market, the CFO must keep companies exit-ready all the time, even if the sponsor isn’t planning to sell. Because in a way, you’re always being sold. You just don’t know when or to whom.