What characterizes a stapled secondary transaction?

A stapled secondary transaction is distinctively characterized by the inclusion of a sale of an existing fund interest along with a commitment to invest in a new fund. This structure serves a dual purpose: it provides liquidity to the seller by allowing them to exit their position in one fund while simultaneously facilitating a new opportunity for investment, thereby fostering ongoing relationships and capital flows within the private equity space.

This approach is particularly appealing as it can attract a broader range of buyers who might be interested not only in acquiring existing interests but also in establishing fresh commitments. Such transactions leverage the established performance and reputation of the existing fund to entice commitments to the new fund, thus creating added value for both the seller and the buyer.

While the option involving the sale of a fund interest without further commitments lacks the enriched dynamics and benefits of stapled secondary transactions, the other choices mention aspects that do not align with the nature of stapled secondary transactions, such as being limited to only liquid assets or being confined to public markets. Such traits are not relevant to the concept of stapled secondary transactions, further solidifying why the second choice is the correct characterization.