The secondary direct market is a relatively young part of the private equity industry. While secondary transactions involving limited partnership interests have taken place for the last twenty years and become a very large market over the last decade as primary fund raising reached billion-dollar levels, secondary direct transactions have been a more recent part of the deal activity.

The secondary direct market revolves around the transfer of direct investments, both individual assets and entire portfolios, which were typically entered into by organizations ranging from institutional investors such as banks and insurance companies to industrial corporations and, more recently, private equity and hedge fund partnerships.

Early on in the life of the secondary direct market, many investors' strategy and commitment to private equity were severely tested following the market downturn in 2001-3. Against the background of negative investment returns, extended holding periods and increased cash requirements, some (especially more recent entrants) decided to reduce or withdraw fully from the private equity asset class – a step that was most practically facilitated by a portfolio-level disposal of assets.

More recently, with market conditions stabilized and a benign exit environment assisting liquidity goals, many investors have adopted a more proactive attitude toward managing their private equity exposure, including selective sales of individual assets or portions of larger portfolios.