Key Tax Considerations For Secondary Sales Of Private Funds

Law360 (April 30, 2020, 6:38 PM EDT) -- COVID-19 is not only a global health crisis but also an economic crisis. In the coming months, certain fund investors may prefer to seek liquidity options with respect to their investments in order to weather the storm.

Perhaps the simplest way for a fund investor to achieve liquidity is by selling its fund interests in the secondary market. The secondary sale accelerates liquidity for an investor before the fund disposes of its underlying investments.

Over the last 10 years that market has matured, driven not only by limited partners but by the rise of sophisticated funds and advisers focused on secondary...

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