Former Blackstone Executive Mustafa Siddiqui has launched SQ Capital, a newly established private equity secondaries firm, with the goal of tapping into the growing demand for liquidity in the middle-market sector, according to a report by Wall Street Journal.
The firm’s strategy reportedly focuses on private equity assets that are largely untapped by other secondaries managers. It aims to achieve this through a blend of equity and equity-like investments, targeting both limited partner (LP) interests and continuation vehicles.
“The secondary market is at a major inflection point — last year’s market volume, already at close to $150bn, represents only 2% of total private equity assets under management and the opportunity set is growing much faster than the ready supply of dedicated capital,” said Siddiqui.
Before founding SQ Capital, Siddiqui was the Global Head of GP Stakes at Blackstone, where he led the firm in acquiring minority stakes in companies like Nautic Partners and FTV Capital.
He began his career in private equity in 2002 at General Atlantic and spent nearly 15 years at Blackstone.
The launch of SQ Capital comes at a critical time for the private equity industry, which has seen a 65% drop in exit flows since 2021, leaving nearly 28,000 portfolio companies unsold. Around 40% of these businesses have been held by private equity firms for more than four years, intensifying the demand for liquidity solutions.
Based in New York City, SQ Capital plans to leverage an AI-driven approach to evaluate secondary market opportunities, using its proprietary platform, SQORE.
