Palico's 5bps Fee Shakes Up Private Equity's Secondary Market

NEW YORK, NY – March 31, 2026 – Digital marketplace Palico has fired a shot across the bow of the traditional private equity secondary market, announcing a dramatic new fee structure of just 5 basis points for transactions exceeding $50 million. The move, effective today, leverages the firm's technology platform to challenge the high-cost, labor-intensive model that has long defined the sector.

In a market historically characterized by opaque negotiations and substantial fees often measured in hundreds of basis points, Palico's pricing is a radical departure. The company insists the change is more than a simple price cut; it's a fundamental re-imagining of how large-scale secondary transactions should be executed.

"This is not about lowering fees. It's about redefining how the secondary market should function at scale," said Antoine Drean, Founder and CEO of Palico, in a statement. "This pricing only exists because we built Palico as a digital-native platform—not as a traditional intermediary."

A New Benchmark for a Booming Market

The private equity secondary market, once a niche corner of finance for offloading fund stakes, has exploded into a mainstream portfolio management tool. With transaction volumes hitting a record $240 billion in 2025 and projections suggesting the market could surpass $300 billion by 2030, it has become a critical source of liquidity and strategic positioning for institutional investors.

Despite this growth, the transaction process has often remained stubbornly archaic and expensive. Traditional intermediation involves significant manual effort, from sourcing buyers and sellers to negotiating terms and handling paperwork, with costs passed on to investors. These high transaction costs can erode returns for both limited partners (LPs) seeking liquidity and buyers looking for value.

Palico's 5 basis point fee—equivalent to just $25,000 on a $50 million transaction—stands in stark contrast to the established norms. By drastically reducing the cost friction for larger deals, the move directly benefits investors, potentially improving net returns and encouraging more frequent portfolio rebalancing. This could unlock further liquidity in a market that, despite its size, is still considered undercapitalized relative to the trillions of dollars locked up in primary private equity funds.

The Technology Behind the Disruption

According to the company, the new pricing is not an aggressive loss-leader but a direct result of its technological infrastructure. Palico operates as a FINRA-approved Alternative Trading System (ATS), a regulatory designation that provides a secure and compliant framework for executing deals entirely online.

"Five basis points is not aggressive pricing. It's what the market looks like when it finally becomes efficient," Drean stated. "When you remove friction through technology, pricing follows. Five basis points is the natural outcome of that."

The platform's capabilities extend beyond just connecting buyers and sellers. It offers end-to-end deal execution, allowing users to move from listing to closing within a single digital environment. Features include automated document creation using market-standard templates, e-signatures for legal agreements, and tools designed to improve price discovery. For instance, the "Palico Price Indicator" leverages proprietary data to provide indicative price ranges, while a "Buy Offers" feature allows buyers to proactively post their investment criteria, reversing the traditional deal-sourcing workflow.

By automating these key parts of the process, the platform aims to replace the 'handcrafted' advisory model with a scalable, efficient infrastructure, structurally reducing the costs associated with secondary transactions.

Pressure Mounts on Traditional Intermediaries

Palico's move places considerable pressure on the established ecosystem of secondary advisors and brokers. While the largest and most complex secondary transactions may still require bespoke, high-touch advisory services, a significant portion of the market could be swayed by a more efficient, low-cost digital alternative.

Traditional firms, which include divisions of major investment banks as well as specialized advisory shops, will be forced to evaluate their own value propositions. The competitive response is likely to be multifaceted. Some may accelerate their own adoption of technology and AI to streamline operations and defend their market share. The ability to process vast datasets for valuation modeling and due diligence is increasingly seen as a key competitive advantage.

Others may choose to double down on specialization, focusing on highly structured, complex deals like continuation funds or multi-asset portfolios that fall outside the scope of standardized digital platforms. However, for the growing volume of straightforward LP stake sales, the argument for paying substantially higher fees will become harder to justify.

This creates a structural dynamic that will likely accelerate the technological evolution of the entire secondary market. As in other areas of finance, the unbundling of services is underway, with clients increasingly able to choose between full-service advisory and more targeted, technology-driven solutions based on their specific needs.

Redefining Market Efficiency and Transparency

Beyond competitive dynamics, Palico's strategy signals a broader maturation of the private markets. The company's status as a regulated entity, with its U.S. operations registered as a broker-dealer with the SEC and FINRA, is critical. It provides the layer of trust and compliance necessary to facilitate high-value transactions on a digital platform, addressing a key hurdle that has slowed technological adoption in private capital.

The push for greater efficiency and transparency is a secular trend. As institutional investors allocate more capital to private equity, they are demanding tools and platforms that provide better data, greater liquidity, and lower costs. Technology is no longer a peripheral feature but a core component of market infrastructure.

The era of relying solely on personal networks and manual spreadsheets to transact billions of dollars in fund interests appears to be waning. As platforms like Palico prove their ability to handle significant deal volumes securely and efficiently, the expectation of what constitutes a 'normal' transaction cost is being reset. This shift benefits the entire ecosystem by lowering the barrier to entry, increasing potential deal flow, and ultimately creating a more fluid and robust market for all participants.