Private equity firms are increasingly tying future fund commitments to secondary market sales in a bid to shore up new fundraising efforts, frustrating limited partners seeking quick liquidity amid heightened market uncertainty, according to a report by Bloomberg.
The report cites unnamed sources familiar with ongoing negotiations as highlighting that, as secondary transactions become a vital liquidity tool for institutional investors, GPs are pushing back by requiring so-called stapled commitments. Under these arrangements, prospective buyers of LP interests must also pledge capital to the manager’s upcoming fund as a condition for approving the sale.
The tactic, though not new, is becoming more widespread as private equity firms grapple with sluggish fundraising and tougher economic conditions, including high interest rates and geopolitical shocks like the recent tariff escalation under US President Donald Trump.
Major secondaries buyers such as Carlyle and Blackstone have reportedly been involved in deals requiring staples, though the practice appears most prevalent among mid-sized managers with a more urgent need to secure capital for new vintages.
One recent example includes the New York City Employees’ Retirement System (NYCERS), which sought to offload a multi-billion-dollar portfolio that included a sizeable stake in Palladium Equity Partners. Palladium, aiming to cultivate long-term investor relationships, asked that potential buyers commit to its upcoming fund in exchange for consent to transfer NYCERS’ position. Blackstone’s secondaries platform ultimately stepped in and agreed to the condition, completing the transaction.
Private equity firms typically retain consent rights over secondary transactions involving their funds, a leverage point some are now using more aggressively. “Some choose to be more aggressive than others in potentially withholding their consent,” said Jeff Keay, Chair of the Secondaries Investment Committee at HarbourVest Partners.
According to PitchBook, over $500bn globally is now earmarked for secondaries strategies across private markets. Yet transaction volumes have slowed, reflecting both market turmoil and the friction created by staple demands.
The broader context reveals mounting pressure on buyout firms. Global private equity fundraising dropped to $508bn in 2024, down from $605bn the year prior and marking a four-year low. Managers now take nearly 17 months on average to close new funds, the second-slowest pace since 2010.
Pantheon’s Imogen Richards confirmed the trend, noting that many GPs are requesting staples during secondary sales. “A large number of firms who are fundraising are making these asks,” she said, adding that Pantheon has resisted some of these conditions in recent transactions.
As sovereign wealth funds and pensions tighten their allocation criteria — demanding lower fees, more co-investments, and quicker access to legacy capital — private equity managers are increasingly using staples to protect their future fundraising pipelines.
“With some GPs taking two years or more to raise funds, asking for staples, even if only a fraction of the size of what is being divested, can be very valuable,” said Keay.
