What is secondary trading in private equity?
Secondary trading refers to the buying and selling of existing shares in private companies between investors - without the company issuing new shares. Unlike public markets, private equity has historically lacked the infrastructure to make this process transparent or efficient. That's what this post unpacks.
This post is relevant if you're a founder considering tokenized equity, an investor in private companies looking for liquidity options, or a CFO evaluating shareholder management tools.
Why Secondary Markets Exist
Secondary markets exist for one simple reason: ownership and liquidity are not the same thing.
Investors may want to adjust their exposure over time, rebalance portfolios, exit earlier than expected, or enter a company after the initial issuance.
In public markets, this is solved through continuous trading. In private equity, it's traditionally solved through manual negotiations - if at all.
The demand is the same. The infrastructure is not.
How Secondary Trading Works in Public Equity
Public equities trade through a centralized order book.
At any moment, buyers submit bids (prices they're willing to pay), sellers submit asks (prices they're willing to accept), and trades execute automatically when prices match.
Key characteristics:
- Continuous price discovery
- High liquidity
- Immediate settlement
- Full market transparency
Image 1. Public Market Infrastructure graphic
This model works because public shares are digitally native, standardized, freely transferable, and backed by automated settlement systems.
Why Secondary Trading in Private Equity Has Lagged
Private equity lacks several of these prerequisites.
- Shares are not digitally native.
- Ownership records are fragmented.
- Transfers require legal coordination.
- Settlement is slow and manual.
- Markets are episodic, not continuous.
As a result, the private equity secondary market operates off-platform, without transparency, and often without reliable price signals.
The logic of secondary trading is sound - but the tooling has been missing.
The Missing Building Blocks
To enable real secondary trading in private equity, three things are required:
1. A digital representation of ownership
Shares must exist in a form that
can be transferred programmatically.
2. Embedded transfer and compliance rules
Not every share can be traded
freely. Rules must be enforced automatically.
3. A market interface for supply and demand
Investors need to see prices,
place orders, and trust execution.
Aktionariat was designed around these exact requirements.
How Aktionariat Enables Secondary Trading in Private Companies
Tokenized Shares as the Foundation
Private shares are issued as tokenized securities under Swiss DLT law. This creates a single, authoritative ownership record, programmable transfer conditions, and real-time settlement upon trade execution.
Without tokenization, a true order book is impossible.
90+ Swiss companies have tokenized their equity through Aktionariat, with over CHF 59M in investment volume processed across the platform and more than 35,000 registered investors participating. Now, more and more tokenized companies are implementing Aktionariat Secondary Trading for their shareholders and potential investors.
A Private-Market Order Book
Aktionariat applies the order book logic of public markets - adapted for private equity.
With Secondary Trading, investors can place buy and sell orders, set limit prices, view open orders and market depth, and trade directly with other shareholders.
Unlike public markets, liquidity may be lower - but the logic remains intact.
How a Secondary Trade Works: A Concrete Example
An early investor in a Swiss tech company holds 500 tokenized shares. Three years in, they want to rebalance their portfolio. Rather than waiting for an IPO or negotiating privately, they log into the Investor Page, place a sell order at CHF 120 per share, and set a limit price.
A new investor sees the open order, places a matching bid, and the trade settles automatically on-chain. The shareholder registry updates in real time. No lawyers, no delays.
Image 2. Secondary Trading Workflow diagram
Public vs. Private Order Books: A Comparison
| Public Equity | Tokenized Private Equity with Aktionariat | |
|---|---|---|
| Venue | Central exchange | Company-specific market |
| Trading style | High-frequency | Investor-driven |
| Liquidity | High | Selective, episodic |
| Participants | Anonymous | Known, verified investors |
| Execution | Fully automated | Automated within defined rules |
| Activity | Continuous volume | Irregular but transparent |
The goal is not to mimic public markets - it's to bring their clarity and discipline into private ownership structures.
The Role of the Investor Page
The Investor Page is the visible layer of this logic. It brings together live pricing and last trades, bid and ask levels, order book depth, and personal open orders and trade history.
Image 3. Secondary Trading Interface on the Investor Page.
For investors, this means clear price expectations, confidence in execution, and transparency in market activity.
For companies, it means structured secondary trading, no manual coordination, and a clean, real-time shareholder registry.
Why This Matters
Secondary trading in private equity should not rely on exceptions, favors, or informal agreements.
When ownership is digital and markets are transparent, prices become signals rather than rumors. Liquidity becomes optional rather than chaotic. Ownership becomes dynamic rather than static.
Aktionariat doesn't turn private equity into public equity. It gives private markets the infrastructure they have always been missing.
Frequently Asked Questions
What is secondary trading in private equity?
Secondary trading in private
equity refers to the buying and selling of existing private company shares between investors,
without the company issuing new shares. Unlike public markets, private equity has historically
lacked the infrastructure to make this process transparent or efficient.
How does a private equity order book work?
A private equity order book
works like a public market order book: buyers submit bids and sellers submit asks. When prices
match, a trade executes automatically. With tokenized shares, this process is automated and
compliant within predefined transfer rules.
Can you sell private company shares before an IPO?
Yes. With tokenized
shares and the right compliance infrastructure, existing shareholders can sell to eligible
investors without requiring an IPO or M&A event. Platforms like Aktionariat enable this through
blockchain-based settlement and an order-book market interface.
What is the difference between primary and secondary markets in private equity?
Primary markets involve new share issuances directly from the company to investors.
Secondary markets involve existing shareholders selling their shares to new investors, without
the company raising new capital.
Is secondary trading in private equity legal in Switzerland?
Yes. Swiss
DLT law, which came into effect in 2021, established a legal framework for tokenized securities
and compliant secondary trading of private company shares. Aktionariat operates under this
framework.
A Market Logic Built for Private Companies
The future of private equity isn't about faster exits. It's about better ownership over time.
Secondary trading - done right - is a core part of that. With tokenized shares, automated settlement, and an order-book-based market interface, Aktionariat makes secondary trading in private equity not just possible, but logical.
Ready to enable secondary trading for your company? Book a demo or start for free today.
