European Commission explores plans for a regulated secondary market to boost private equity exits

The European Commission has opened a targeted consultation aimed at easing the pathway for investors to realise gains from stakes in unlisted companies, signalling fresh regulatory interest in a long-running liquidity squeeze across private markets.

On 2 March the Commission invited market participants to flag obstacles that hamper exits from private equity holdings, to assess the case for a regulated secondary trading venue for private company shares and to consider whether such a platform might also be used to raise fresh equity. Respondents have until 27 April to submit views, according to the Commission’s announcement.

“Despite past policy efforts, private equity investors in the EU continue to face challenges when seeking to exit their investments,” the Commission said in a statement. It added that an organised trading facility for private company stock could improve price discovery, drive down costs through standardised processes and shorten transaction timetables, which over time might lift liquidity and make European private assets more attractive to investors.

The intervention comes against a backdrop of gradual improvement but persistent delay in exits. Private markets diligence platform Gain reported that exit activity in Europe rose around 5 percent year-on-year in 2025, marking a second consecutive year of growth, yet median holding periods lengthened to 5.7 years last year compared with 4.7 years five years earlier, leaving roughly one third of assets in portfolios for more than seven years. PwC data show EMEA IPO proceeds at $22.6 billion from 130 listings in 2025, down from $31.7 billion in 2024 and broadly in line with 2023; seven of the region’s ten largest floats were backed by private equity sponsors.

Bringing a secondary marketplace into the regulatory fold is not a novel concept. Commercial ventures already connect buyers and sellers of unlisted equity: TrancheBook promotes itself as a compliance‑oriented bulletin‑board for EU/EEA private-company secondaries that preserves issuer rights and cap‑table control, while other platforms such as Moonfare and global marketplaces have broadened retail and institutional access to private fund allocations. The Commission and industry will weigh how a pan‑EU trading facility would differ from, or complement, existing private channels and whether it could overcome current frictions, including valuation opacity and contractual transfer restrictions.

Public-sector efforts to bolster transparency and market infrastructure are already under way. The European Investment Fund announced an online portal in March 2025 to publish historical fund performance data for European venture and private equity strategies, a project intended to deepen the domestic capital base for SMEs and mid‑cap companies. Industry advisers have likewise noted the potential for better data and standardisation to reduce information asymmetries that deter secondary transactions.

Market participants point to geopolitical and macro forces that complicate exits. Recent international trade and diplomatic shocks have shifted capital flows and prompted some global limited partners to rebalance away from US private markets, potentially favouring European opportunities; conversely, heightened uncertainty can suppress willingness to transact. Against this mixed picture, some corners of the market are optimistic that more capital and improved mechanisms for trading stakes, particularly by facilitating secondary buyouts or controlled transfers, could help clear the backlog.

The consultation also intersects with national policy ambitions, notably in the UK where officials are pushing to unlock pension savings for long‑term private investment. Government initiatives including the Mansion House Compact and follow‑up accords envisage shifting a material slice of defined contribution default assets into unlisted markets by 2030, a move that would require new product designs such as Long‑Term Asset Funds, revised fee models and stronger reporting to satisfy large workplace and local government schemes. Asset managers and pension allocators are already restructuring offerings to suit these institutional needs, with some large schemes scaling blended LTAF solutions and others pursuing fee structures that emphasise co‑investments and reduced performance fees.

Public pensions pools are also reorganising to absorb greater private exposure. Border to Coast Pensions Partnership has expanded its private markets team to manage transitions of legacy holdings from partner funds as part of reforms designed to capture scale benefits and lower costs across local government pension schemes.

The Commission’s exercise will test whether regulatory change can complement private innovation and public data initiatives. Commercial platforms such as TrancheBook and the broader market for pre‑IPO share trading, recently exemplified by corporate activity in the US where marketplaces have drawn acquisition interest, illustrate existing supply lines for liquidity that any new EU scheme would need to integrate with or improve upon.

Industry and adviser commentaries, including coverage from PwC, emphasise the need for careful design: any trading venue must balance issuer control, investor protection and transparency while avoiding unintended market dislocation. The Commission’s consultation seeks practical evidence on these trade‑offs from fund managers, investors, company issuers and other stakeholders before deciding whether further policy measures or a formal EU trading framework are warranted.

As Europe debates whether to institutionalise a secondary market for private company shares, market participants and policymakers alike will be watching whether the proposals can shorten holding periods, expand investor participation and ultimately make domestic growth capital easier to secure without undermining corporate governance or investor protections.