‘The secret world of secondaries’: How a niche area of finance is emerging as a new liquidity engine in the Gulf

Gulf secondary-market turnover on Bloomberg’s electronic markets platform nearly doubled from $22 billion in 2022 to $40 billion in 2025, while issuance rose from $246 billion to $452 billion. The expanding market is responding to longer exit horizons, scarce M&A and IPO activity—MENA recorded 46 M&A deals and two IPOs in 2025—and Key Capital is targeting a $50 million fund, citing average purchase discounts of 35%–45% to NAV. The opportunity remains nascent and involves illiquid private-company stakes.

Analysis

The investable signal is market plumbing, not a near-term earnings catalyst: secondary sales transfer ownership but generally do not finance the company. They can ease founder and employee liquidity pressure and help retain talent, while also competing with primary rounds for investor capital and revealing that prior private marks may be stale. Over time, better liquidity could support Gulf VC fundraising; initially, it may instead reset valuation expectations and make primary investors demand stronger terms.

Treat the quoted 35–45% NAV discounts as a manager-reported opportunity, not proof of cheap assets. In a young market, discounts can compensate for weak price discovery, concentrated exposure, governance limits, currency risk, or adverse selection. Electronic-platform turnover, an estimated regional market size, and global transaction volumes are not directly comparable measures of addressable Gulf opportunity.

Days: limited read-through to listed equities absent a disclosed, material revenue or capital commitment. Over 1–3 months, watch for independently confirmed fund closes, completed transactions, and disclosed pricing. Over 6–18 months, successful exits and repeat transactions could improve capital recycling; failure to deliver distributions would undermine the liquidity thesis. Key Capital’s partnership with SHUAA Capital is a possible route to market, but its financial contribution is unverified.

Key Decisions for Investors

• No broad listed-equity trade on this article alone. Do not infer a near-term benefit to Gulf IPOs or M&A from secondary turnover: these transactions can defer, rather than create, conventional exits.
• Put Key Capital and SHUAA Capital on a diligence watchlist, not a buy list. Verify fund commitments and close status, deployment pace, realized versus marked returns, transaction fees, and the partnership’s economics before assigning earnings or valuation impact.
• For private-market exposure, underwrite discount-to-NAV deals using company-level financials and independently supportable marks; require evidence of revenue quality, path to profitability, transfer rights, and exit options. Treat the claimed discount as a screening lead, not a margin of safety.
• Falsify the liquidity-growth thesis if announced fund targets fail to convert into closed capital and completed deals, or if subsequent exits and distributions remain scarce. A few transactions without repeat buyers or observable pricing would not establish a durable market.