Tender Offer
A structured offer by a buyer — often arranged by the GP or a secondary market specialist — to purchase fund interests from existing LPs at a specified price within a defined period.
Tender offers provide liquidity to LPs who need to exit before the fund's natural term without requiring a full secondary transaction. The process is typically managed by the GP or a third-party intermediary and offers LPs a clean, structured exit at a known price.
Tender offers have become more common as the secondary market has matured, providing an additional liquidity mechanism alongside traditional LP-to-LP secondary sales.
Frequently Asked Questions
What is a tender offer in private equity?
A tender offer is a structured offer to purchase fund interests from existing LPs at a specified price — providing a clean, managed exit for investors who need liquidity before the fund's natural term.
How do tender offers differ from secondary sales?
Tender offers are structured processes managed by the GP or intermediary at a set price and timeline. Secondary sales are bilateral negotiations between buyer and seller, often at negotiated discounts or premiums to NAV.
Who typically arranges tender offers?
GPs or specialized secondary market intermediaries arrange tender offers. The GP may facilitate the process to help LPs achieve liquidity while ensuring continuity of the fund's investor base.
Explore with Ora
Ask Ora anything about tender offer and related investment concepts. Get Bloomberg-grade intelligence in plain English, in seconds.