According to the 2025 African Private Capital Activity Report published by the African Private Capital Association, exits in Africa have seen a marked increase in volume and strategies in 2025 (81), almost matching the peak volume in 2022 (83). Prominent with a 38 percent lead in exit strategies is trade sales, followed by secondaries at 26 percent, which has demonstrated a gradual increase in recent times.
The 2025 African Private Capital Activity Report further indicates that the rise in secondaries in 2025 may be attributed to increased activity in the Financial sector, which tripled year-on-year and represented 43 percent of secondary exits.
1Other exit strategies, such as Management Buyouts and IPOs, are also increasingly explored as exit strategies within the African PE space. After the global financial crisis of 2007–2008, the secondary market experienced significant growth.
Regulations in certain countries compelled banks to sell their Private Equity (PE) exposure. This forced the evolution of PE strategies to absorb the released exposure. The increase of Limited Partner (LP) exposure in PE over the last decade has also fed into the need for alternative liquidity measures, fueling the growth of the secondary market.
This article, however, seeks to zoom in on secondaries, the second-highest exit strategy by volume in Africa (2025), to assess the readiness of the Ghanaian market for GP-led secondaries.
Types of Secondaries
Traditionally, the secondary market was focused on a clean exit strategy, usually involving a sale from one fund to another fund. Over the years, the secondary market has become more nuanced with more complex structures, some of which entail a transfer between two entities with the same General Partner(GP) involved.
There are two main types of secondaries: LP-led and GP-Led. Ghana’s PE regime is slightly different in structure from global trends. To situate these types of secondaries within the Ghanaian context, these may be referred to as “fund manager-led” (GP-led) and “investor-led” (LP-led). In LP-led secondaries, a Limited Partner (LP) may wish to sell its interest in a PE Fund to a Thirdparty Investor (Buyer).
Essentially, the Buyer steps into the shoes of the LP and assumes all the outstanding benefits and obligations of the LP within the Fund. In Ghana, these transactions are typically governed by the foundational documents of the PE Fund, such as the Shareholders Agreement, which may impose restrictions on the transaction.
Generally, LP-led secondaries are viewed as a viable route to assuage liquidity issues of LPs, given the extended investment cycle of PE Funds (usually 10 years with limited extensions). GP-led secondaries, as the name suggests, are broadly used to refer to secondaries spearheaded by General Partners (GPs). They are usually used for asset life extension, managing concentrated positions, and managing fund end-of-life pressure. GP-led secondaries typically take three forms:
- Continuation Funds/Vehicles
- Strip Sale
- LP Tender Offer
Continuation Funds often come into play in the case of a duration mismatch between assets and fund life. To put it simply, the asset may require a bit more time and/or money to maximize value, which may go beyond the fund’s life (usually 10 years with limited extensions).
In this instance, a Continuation Vehicle (CV) is set up with secondary investors to acquire asset(s) with high growth potential. Existing LPs may be given a limited opportunity in this instance to cash out, roll over into the CV, or explore a hybrid. The CVs are typically characterized by lower management fees. They are generally viewed as carrying lower risk relative to primary funds, given that the GP brings the benefit of time, information, and operational involvement with the asset, although pricing and conflict-of-interest risks remain.
In Ghana, although there have been secondary buyouts such as the exit of Adenia Partners from Outdoor Holdings Limited to Injaro Ghana Venture Capital Fund2 (this was modelled after a generic structure of a sale from a PE Firm to another PE Firm), there is no record of GP-led secondaries using structures such as CVs.
Global Perspective- Issues with GP-led Deals and Mitigation
Although GP-led secondaries come with certain advantages, admittedly, some embedded issues arise. Key amongst such issues is the existence of a conflict of interest. In a CV, the GP is technically the buyer and the seller. This raises concerns about whether the GP can act in the best interest of the primary fund and the CV.
Additionally, the participation of the GP on both sides and the potential advantage that GPs may gain from the deal raise questions about pricing and the valuation of assets. There is also the potential for GPs to structure deals to accrue carried interest.
This may be done by segregating high-growth potential assets into separate funds that are likely to generate returns exceeding the hurdle rates. In the initial fund, where that high-growth asset and other underperforming assets are mixed, there is a relatively increased chance that the hurdle rate may be marginally met or missed entirely, reducing or potentially eliminating carried interest altogether.
Although most developed markets do not have extensive structured legal regimes for secondaries, these issues are mitigated by the involvement of LP Advisory Committees (LPACs) in the deal process alongside the use of independent fairness opinions and stapled commitments.
Focus on Ghana
Ghana is still in the early stages of exploring sophisticated legal regimes for PE structures. At the very core, the current legal framework comprises the Companies Act, 2019 (Act 992), Securities Industry Private Funds Guidelines (SEC/GUI/002/04/2018), and Securities Industry (Financial Resources) Guidelines 2025. Other peripheral laws may apply in relation to foreign participation, foreign exchange remittance, and tax, among others.
The legal regime does not directly address GP-led secondary deals and the structures that it anticipates. This presents significant regulatory challenges that undermine investor confidence and leave GP-led secondary structures without the legal backing needed to legitimize them and ensure adequate investor protection.
Market Positioning
There have been extensive efforts to procure the engagement of pension funds in PE Funds as viable investors. Despite the restrictions imposed on pension funds on their investment portfolios and their historically conservative investment approach, a case may be made for the exploration of secondaries as a backstop to provide liquidity assurance for pension funds.
The support of a comprehensive regulatory regime for such deals may instill the confidence needed by pension funds to increase their exposure with PE funds and even explore secondary deals. Securing the willing participation of DFIs may prove difficult at the initial stages.
Similarly, major offshore LPs typically have sufficient negotiating leverage to insist on their own redemption timelines and resist being rolled into CVs. There is therefore a need to develop a more robust pricing and valuation framework that the DFIs and LPs may be willing to consider.
In addressing the pricing issues, there is currently no established price discovery mechanism for the secondary market. This poses difficulty in navigating asset pricing within the peculiar world of secondaries. The current currency risk further enhances the complexity of Net Asset Value calculations and translations.
This makes negotiations and discussions multilayered. There is therefore a need to develop a more tailored pricing and valuation mechanism that caters to the peculiarities of PEs and secondary markets. Notwithstanding the highlighted issues, there are identifiable opportunities in exploring the secondary market in Ghana. The PE and secondary market are heavily trust-reliant. The global issues of conflict of interest and reliability also apply and play a major role in the successful execution of secondary market deals.
There should therefore be a two-pronged approach to establishing the secondary market. Regulators are key in establishing parameters and systems to legitimize the deals and structures that may be explored within the market. The call for an enhanced regulatory regime also extends to favorable tax laws, foreign exchange remittance policies, and the general legal ecosystem. A specialized price valuation mechanism should also be established to guide the pricing and valuation with the level of transparency required.
Lawmakers may also consider a variation of the restrictions on the investments of pension funds to encourage investment within the PE sector, with the needed stop-gaps provided. Given the infantile stage of Ghana’s secondary market, the opportunities for persons interested in exploring the secondary market as a mainstay in Ghana may start with positioning to explore LP-led secondaries. This is a less complex structure that may be used to establish a reputation within the secondary market.
DFIs are also recognized for patient funding, and with strategic terms proposed, it may be possible to obtain the backing of DFIs to explore secondaries, specifically continuation funds. Extensive efforts must also be made to educate qualified investors on the secondary market. Understanding the structures and potential benefits with a key awareness of the pitfalls may encourage participation.
Ultimately, understanding that investing in a CV is investing in “pre-tested” assets may increase investor appetite. Attention must also be paid to the fact that the secondary market is not a final exit in itself. GP-led secondaries will require exit strategies, which must be considered at the commencement of the deal.
In conclusion, although Ghana’s PE ecosystem does not readily contemplate a complex secondary market, there are opportunities to explore potentially beneficial structures with the appropriate regulatory structure and ideal market positioning.
The growth of the secondary market in Ghana may therefore be contemplated in the medium to long term, and efforts must commence towards market readiness to avoid exploration under pressure prompted by an unforeseen global financial crisis.
1https://www.avca.africa/media/giqpzbh2/avca25-16-apca-annual-report_public_2.pdf
2https://www.adenia.com/news/adenia-exits-outdoor-holdings-limited-to-injaro-ghana-venture-capital-fund/
Michelle Nana Yaa Essuman; Partner, B&P Associates
Michelle Nana Yaa Essuman is a Partner at B&P Associates, a full-service law firm, where she has built her career, rising from legal intern to Partner through sustained expertise.
Her private equity practice covers the full financing lifecycle, from structuring through execution. She has advised clients across multiple rounds of equity financing, including private equity transactions and rights issues, with particular depth in highly regulated sectors.
Her transactional work spans complex corporate structuring, joint venture arrangements, and regulatory compliance, serving a multinational client base across telecommunications, oil and gas, civil aviation, insurance, and renewable energy.
About B&P Associates
B&P Associates is a full-service law firm with top-tier rankings from both Chambers and Partners Global Guide and Legal 500 EMEA. Its private equity-relevant practice spans mergers and acquisitions, equity financing, joint venture structuring, and regulatory compliance.
Its lawyers are licensed across Ghana, England, and Wales, while its exclusive membership in TAG Alliances connects clients to over 160 member firms across 100 countries. For PE funds navigating Ghana’s investment landscape, the firm offers a well-evidenced blend of local expertise and international reach.
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