The principal categories of vendors of direct investment assets and portfolios are financial institutions such as banks and insurance companies, industrial corporations, in particular those with dedicated corporate venturing or investment holding arms, as well as independent fund and asset management firms engaged in private equity.

Financial institutions, driven by regulatory demands like Basle II, have cyclically increased and decreased their exposure to the private equity asset class in order to achieve various investment and broader strategic objectives.

Corporate investors, similar to banks and insurance concerns, have participated in the direct investing market for financial as well as strategic reasons, in particular to gain a “window on technology” as well as to capture equity value and financial returns generated, for example, by a strategic sourcing/supply relationship with a (portfolio) company.

Private equity general partnerships and their funds have become the most recent group of secondary direct market participants, especially in the last two to three years. With many funds now reaching the end of their investment period or end-of-life stage, fund managers have come to appreciate the secondary direct market as an efficient and practical route to liquidity. In part, that process has been accelerated as a result of GPs' accelerated fund-raising cycles, increased fund sizes and, related to both trends, the need to exit an ever growing number of unrealized investments in a timely fashion.