Introduction
Most bids in a secondary process can be ranked on one line: a percentage of net asset value (NAV), a cash amount, a closing date. A stapled secondary bid cannot, because part of it is paid in another fund: the buyer prices existing fund interests and attaches a commitment to the general partner's (GP's) next fund, so the bid must be split before anyone can call it high or low. GPs now ask for staples more often. Bloomberg reported in April 2025, in a story relayed by Private Equity Wire, that fundraising managers were tying their transfer consent on limited partner (LP) stake sales to buyers committing to the next vintage. For the placement agent raising that fund, a staple is capital; for the sellers, it is a cost to be measured.
Where a Staple Attaches: LP Sales, Tenders, and CVs
From the placement agent's seat, a secondaries-assisted fundraise starts with the order book. The re-up analysis in the fundraising process from pre-marketing to final close also flags the LPs that will not come back. Each is a seat a secondary buyer could take, with a new commitment attached.
- Secondaries-Assisted Fundraise
A primary fundraise in which part of the new fund's capital comes from secondary buyers who commit to it as a condition of, or alongside, buying interests in the manager's existing funds. Departing investors get liquidity, and new limited partners take their place.
The structure decides who asks for the staple and whose price absorbs it. The first row is the one GPs reach for more often, since it needs only a transfer request.
| Structure | Who asks | Where the cost lands | Check on price |
|---|---|---|---|
| LP-led portfolio sale | GP, via transfer consent | Selling LP | Bids from buyers not asked to staple |
| GP-led tender offer | GP, arranging the buyer | LPs who tender | An unstapled tender price |
| Continuation vehicle (CV) | GP, or a lead bidding to win | Selling LPs; rollers if terms shift | LPAC review of the winning bid |
There the seller never asked for a staple; the GP imposes it through a consent right many partnership agreements leave to its discretion, as transfer mechanics and GP consent explains. In a tender offer the GP designs the process, covered in tender offers and strip sales. In a CV, the staple is usually a lead's commitment to the next flagship fund, offered to win.
Reading the Combined Economics of a Stapled Bid
A stapled buyer prices the two halves together. It asks what the whole package returns and how much secondary discount it needs to accept the primary.
A Worked Example: Two Bids for the Same Interests
An illustrative LP is selling Fund IV interests with a reference NAV of $250 million and little unfunded commitment, while the manager raises Fund VI. Buyer B bids 92%, unstapled. Buyer A, which also runs a primary program, bids 88% and commits $80 million to Fund VI. Both expect about $300 million of distributions over four years.
| Line | Buyer B, unstapled | Buyer A, stapled |
|---|---|---|
| Price, % of NAV | 92% | 88% |
| Cash to the seller | $230 million | $220 million |
| Commitment to Fund VI | None | $80 million |
| Multiple on the secondary | 1.30x | 1.36x |
Buyer A's blended return treats both as one: $300 million from the secondary plus $128 million from the primary at 1.6x net, on $220 million paid now and $80 million called later, about 1.43x. Secondary distributions also arrive while Fund VI calls capital, softening its J-curve, the early dip this J-curve explainer describes.
Who Pays for the Staple and Who Gains
The four points between the bids, $10 million the seller gives up, are the staple's price, or a cost per dollar committed:
Whether 12.5 cents is fair depends on what the primary lacks. If Buyer A wants 1.7x from a blind-pool commitment and expects 1.6x, the gap is $8 million, a decade out, while the $10 million discount arrives at closing: the buyer is paid with something to spare, and the sellers fund the spare. The GP's $80 million, at an illustrative 1.75% fee, earns about $7 million over a five-year investment period, before carry.
How the Advisor Tests Whether the Staple Is Worth It
The seller's advisor, or the GP's in a GP-led deal, cannot see Buyer A's hurdle rate, so it rebuilds the staple's price from what it can observe.
Unstapled Benchmarks and the Buyer's Own Appetite
The first test is an unstapled benchmark: a credible bid from a different buyer not asked to commit, so the comparison is not set by the party it tests. The second is primary appetite. A buyer whose primary team already approved Fund VI spends money it planned to spend, so its price should sit near the unstapled bid; a pure secondaries buyer will demand the full subsidy or drop out. Asking stapled bidders for an alternative unstapled price turns one opaque bid into two comparable numbers.
The Size of the Primary and the Terms Attached to It
The third test is size: how much new commitment the secondary must carry.
- Staple Ratio
The size of a stapled primary commitment relative to the secondary purchase it accompanies, usually quoted as dollars of new commitment per dollar of secondary price or NAV acquired. A higher ratio means more of the package is blind-pool risk, so the buyer needs a larger secondary discount to reach its target return.
Here the ratio is about 0.36 on price. Double the commitment to $160 million and the shortfall doubles to about $16 million; offsetting it dollar for dollar against the unstapled 92% takes the secondary down to roughly 85.6% of NAV, before any credit for the shortfall arriving years after closing. At some ratio the staple becomes a primary sale with a secondary sweetener. The fourth test is the primary terms, since a buyer can take its compensation as a fee or carry break on Fund VI instead.
How far such a term travels is covered in fund terms and side letters.
Conflicts, Disclosure, and What ILPA Recommends
The GP gains from any staple and usually runs the process, so the Institutional Limited Partners Association (ILPA) treats it as a conflict to disclose, not ban; its guidance binds only where fund documents adopt it. The 2023 continuation fund guidance lists stapled financing among GP incentives the limited partner advisory committee (LPAC) should review, and asks GPs to disclose to it:
- better pricing or economics for acquirers than for rolling LPs, including stapled financing;
- the management fee and carry for LPs allocating primary capital through a staple;
- other term changes tied to the stapled primary capital.
The second item catches a subsidy hidden in fund terms. ILPA's draft CV guidance of June 2026 adds a roll protection: roll options should not be conditioned on minimum commitments or stapled financing.
The advisor has its own conflict when one firm raises Fund VI and runs the tender or CV, since a staple may count toward its fee on primary capital raised. What placement agents do sets out that two-sided position; the defense is disclosing the fee link and letting the unstapled benchmark set the reference price.
Why Explicit Staples Became Rarer, and Where They Returned
The staple was long most associated with the GP-led tender offer, which ILPA's 2019 guidance named as one form of GP-led liquidity process. As continuation vehicles took over, that home shrank: Jefferies' review of the first half of 2025 put tender offers at 1% of more than $47 billion of GP-led volume, CVs at 87%. Inside CVs, explicit staples stay rare while many investors back the next flagship voluntarily, the relationship bid in lead investors and syndication. The explicit ask has since surfaced in LP-led sales, where consent is leverage.
For the placement agent, the last test comes one fund later. A stapled commitment was bought with a discount, not earned with performance, and its buyer has promised nothing about Fund VII. Counting it as a re-up when sizing the next raise recreates an order book fuller than the LP base behind it. The staple that serves the manager best is the one whose buyer would have committed anyway, which is also the one that costs the sellers least.
