When you see a tight, active secondary market for your company's shares on Hiive or Forge, part of what you're seeing is institutional secondary market funds at work. These funds — Lexington Partners, HarbourVest, Coller Capital, Greenspring Associates — are specialized buyers who purchase private company shares, VC fund interests, and LP positions at scale.
How secondary funds work
Secondary funds raise capital from pension funds, endowments, and other institutional investors, then use that capital to buy existing private company interests. They buy from: VC funds that want early liquidity on their positions, founders and early employees who want partial liquidity, and other secondary funds repositioning their portfolios.
How they affect the prices employees see
When a secondary fund decides to accumulate a position in a company — say, targeting $200M in OpenAI shares — they become consistent, price-insensitive buyers at a level individual employees can't match. This buying pressure:
- Narrows the bid-ask spread (they set a high bid price to attract sellers)
- Establishes a 'floor' price below which sellers are reluctant to trade
- Signals to other market participants that the fund's price is a fair value anchor
What it means if your company has strong secondary fund interest
Companies with active secondary fund participation tend to have more reliable secondary prices and more accessible liquidity. If Lexington has built a large OpenAI position, they have every incentive to support a functioning secondary market. For employees, this means: the prices you see on Hiive are more anchored and more likely to reflect true institutional sentiment.
Secondary fund activity is one of the signals PrivatePulse uses to weight the confidence score on Method B (secondary-implied). High institutional activity → higher confidence in the secondary price. Thin, retail-only secondary markets → lower confidence.