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Kahlil Hibri is a co-founder of Tangible Markets, and they develop a market for secondaries. What are secondaries? Secondaries are how investors are able to find liquidity in private funds that are otherwise very hard to trade. Today, Tangible has about $1 billion in annual volumes. You guys all have good stuff to edit with? Yes, it sounds great. Great, okay. Welcome to the latest episode of The Bridge by iCapital. I'm Shinali Basik, the Chief Investment Strategist at iCapitol. And today I am joined by Khalil Hibri. He is co-founder of Tangible Markets. iCapital took a stake in Tangible Market in 2025. Since the firm was founded in 2023, Khalil, you have expanded to about a billion dollars in secondary volumes annually. Explain for a moment why people come to Tangible to transact. What exactly is a secondary? How does it work? And why is it important? Thanks, Shonali. Thanks for having me. LPs come to us for multiple reasons. It could be They might have a personal circumstance where they may want to reduce exposure to a fund or to their entire alts portfolio. It might be because they're doing active portfolio management where they're saying that if they were to get some money off the table and redeploy it to something else, they might make a generally higher return. and they might also be coming to us whether it's them themselves or their RIA or their bank that has distributed these funds they might be coming to us because their fund has gotten long in the tooth so really reached the end of its life and where it actually makes less sense to continue holding to it and there's an opportunity cost to continue holding the position so we help them in all of these cases there's also one last case which is they just want to know what the price is like on the secondary market they're curious they want to Know what their portfolio is worth and we provide that data to them. And it's interesting, speaking of what price is like, you've told me before that you don't want to necessarily focus on the discounts, but actually the price discovery is not as dramatic in secondary markets as what the headlines would suggest. It's become a very competitive, efficient market. So you have a lot of buyers that are emerging or that are long established. And so they know their funds really well. And when they bid, these are educated bids that are done so that they could generate a return for their investment and not to kind of lowball the price, which is maybe may have been the perception in the past. So the fact that we run efficient and clear processes, they know that they're competing with their peers. And so they're more inclined to put in their best price and not a lower price. So when LPs use Tangible, they knows that they're getting really best execution in terms of pricing. Well, they can also counter the offer also. So actually, it brings the buyer's price closer to the seller's price because the seller can say, well, actually, I don't want to sell for this amount. I want to cell for this amount. Exactly. So the sellers come to us, they track market sentiment, they run an opportunity cost analysis. They have a reserve price in mind. We don't share that reserve price. It's confidential. Once they get all of the bids, then they're able to review these bids and compare them to their reserve price. And typically it's close because the buyers are also educated. And so in that case, they just may counter so that the bid and the ask become closer to one another. And this is a private transaction. So the prices are not public to the buyers. The only people that see the bids are the individual sellers. And we've designed it that way so that it stays a discrete market. And you have spent a lot of time and energy, A lot of your employees personally talk to the buyers and the sellers as well. Every week we're connecting. So we have 200 buyers on our platform. All the large secondary funds work with us. All the specialist players also work with US. We speak to them every single week because it's a dynamic market. They may have raised a new fund into a different strategy. They may be looking more for a specific type of fund or a specific type of strategy. So they're always giving us this data and it feeds into their investment parameters. And so whenever we get a deal, we know that we have the freshest data out there in terms of what buyers want. So how many transactions have you facilitated this year? I think we're in the hundreds of transactions. And I think what's really interesting is that our smallest transaction is like 7K in NAV. $7,000. $7000. This is in a fund that is more than 12, 13 years old, where the fund is really at the end of its life or past the end of its live. So you have these situations that are tail end positions. They're called stop positions that people may want to sell just because they don't make sense anymore. Or sometimes the cost of holding it is higher than selling it because the fees, the auditing requirements, all of these positions don't really make sense any more. And we also do the large institutional size transactions, whether it's tail end feeder liquidation, standard offers, large portfolios of LP-led transactions. We do like 500 million plus transactions as well. So what is the largest transaction that you've done then? We're working on a live transaction now that is close to 600 million in NAV. Okay. And so right now we're taping this in the middle of August. So you have as low as $7,000, as high as several hundred millions for one deal alone. Now, when you think about secondary markets, there are a lot of people who look at what's happening and saying, well, there's actually a structural need for secondaries. You look at the private equity backlog, for example, or how much investor money is currently in private equity still waiting for returns. They might seek secondaries to find some liquidity. Where does the private equities market secondaries volume really compare to what you're seeing in credit or venture? What's interesting to observe on the secondary market side is that it's starting to specialize and segment the same way the primary side has. So initially, if you think about how private markets started, it was primarily buyout. And then eventually you had specializations in buyout, middle market buyout mega buyout then you have credit, you have infra, you have real estate, you venture growth. Venture and growth used to be the same thing, then it became venture and then growth. The same thing is happening today on the secondary market side. So you have specialist credit secondary buyers, specialist infra secondary buyers. There are buyers that specialize in fund of funds. You have a lot of buyers that specialize in growth, venture. So the specialization helps because in a market where the underwriting of a secondary buyer reflects the pricing, when you have specialists, they are better at underwriting and therefore their pricing is more competitive than a generalist bidding on a fund that requires specialist knowledge. So we're seeing like specialization in the secondary market. And it's also part of that growth that we're seeing where every week we onboard a new secondary buyer on the tangible platform. What it sounds like you're saying is that the more sophisticated the buyers are, they know what an asset is worth. And in some cases, they'll be willing to pay a lot more for it. I think a lot of people look at secondary markets and say, well, OK, there must be selling when things are sold at a discount. But from what I'm understanding from you, actually, there are many instances where you see funds that are priced above what their net asset value is. Yeah, you're seeing that a lot now in the AI space. So funds that have exposure to strong performing AI names, you have positions that are traded at a premium to NAV. In asset classes like credit and infrastructure, they're trading very close to NAVR. The way that you get the best pricing is through competition. The more competition you have, the more buyers are incentivized to put the best price forward. And so what we do, our main obsession is to maximize competition for any position, whether it's 100K or 100 million. We want maximum competition so that clients have a transparent way of deciding, OK, I got the best prize. Now I can proceed with a sale or not. and then when you have transactions that are closing at a premium that's primarily because the buyers have a more aggressive view on the underlying company than the GP and so they believe that the NAV is is lower than it's supposed to be the marks are lower than they are so that's what it's essentially secondary buyers do they are underwriting the GP's NAV and the GP's marks I want to talk about the secondary market writ large because there's GP led transactions, where the asset manager may look to sell, let's say, an asset or a pool of assets. But then there's also the LP-led transaction, which is the majority of what you do, right? And it's where a single investor, a big institution, or an individual investor can say, well, we want to sell our interest in a fund. Now, when those LPs are coming to you, what are the primary reasons that they're looking to sell? So the primary reasons are either a personal circumstance, so people for a specific reason need to sell. The other reason is just active portfolio management. They want to redeploy the proceeds or the cash that they have into something that today they feel is more compelling. So they need to do this analysis of whether it makes sense to continue investing in the same fund or whether selling at a small discount and then redeploying those proceeds is going to generate a higher return. So a lot of the work that we do is not just selling funds. So we do a lot work on price discovery and we provide a lot analytics and we provided these to the RLPs without charging them for it. And what they primarily do is like, is a secondary solution right for me? Is now the right time? Is what I'm redeployed my proceeds into going to generated a higher returns? Once they've done that exercise, then they can decide whether the secondary market is the right solution. So it's incredible. There are a lot of people who are on the platform. I was just like hunting out for the numbers here. I want to say $100 million? $100 billion. $100 trillion. Just monitoring their portfolios. So $100 billon liquidity on the Platform, monitoring portfolios only. Yes. So this is client LPs that are monitoring pricing based on market sentiment that we provide so that they can decide if right now is the best time to utilize the secondary market. So they don't come to us just when they want to sell. They come to use us as a portfolio monitoring solution. If they decide to use the secondary marketplace, they also naturally use us because they like us and we're wonderful and we have a great platform. So it's kind of a way for people to use it, not just when we want to send. And I think that's how the conversation related to secondaries has shifted from just transactional to proper portfolio monitoring and active portfolio management. Even when I had previously gone through some of the analytics that were on the platform, which are very robust, by the way, when you go through those analytics, how often are people looking at their exposures and saying, well, wait a minute, maybe I thought I wanted that liquidity, but I'm better off holding? How often is that decision made on a daily basis? I think around 40% of the LPs that actually explore the option of selling on the secondary market decide to either wait and continue monitoring or not to sell at all. And only 60% actually move forward to the next step, which is to launch an auction. And that's great because we've managed pricing expectations. People who now actually go to launch a process know what numbers they have in mind in terms of prices and returns that they're looking at. And so when they actually, when the bids start coming in, there's a lot of education that's been done on the sell side, but we also do a lot of education on the buy side to make sure that there's a very narrow bid-ask spread. And then through counter offers, which we also offer on our platform, then this bid- ask spread narrows further, and then there's more likely, it's more likely that a transaction is going to close. Once a process launches on Tangible, around 90% or more actually go to closing. This year, the secondary market had a reported record number of assets, more than $120 billion deployed for deals in the first half of this year alone. I believe I'm looking at data from Evercore here on just what the overall market looks like. Now, if the market has been growing so much, what has that meant for you in terms of how much the spreads are narrowing on the platform? Because by the numbers, volumes of buyers and sellers are rising. So the numbers of buyers is rising and that makes more competition. In a typical auction that you monitor, you see that there's always like, it's become a very disciplined market. So the difference between different bids is actually not very high. They're all clustered around one price. And then you sometimes have outliers where buyers are very confident about, or they're already LPs in the fund. and so they're more likely to bid higher because they've been monitoring the fund themselves for like five, six years and so, they're most likely to put in better pricing. You also have different types of buyers. So, we have secondary funds that are active buyers on the platform but we also have individual family offices and other institutional investors that are there and their reasons for investing is not necessarily to generate an IRR and a hurdle for their investors. it's primarily because they missed out on the fund on the primary market and so they're just filling out or you have family office that just got set up and they're just trying to deploy into vintages that they missed out on or strategies that they didn't invest in enough and so the dynamics are really interesting and so pricing is not just driven by the institutional secondary funds but there's also like a whole new group of buyers emerging. So what are those new types of buyers? I mean for people who are entering the secondary market for the first time? What do you tell them? Every single time we onboard an investor on the sell side or like on the portfolio monitoring or LP side, they ask us, could we also be buyers? And so you have large pensions, large endowments, sovereign wealth funds, you have individual family offices that are, and also enterprise RIAs now want to also be buyers on the secondary market and so they ask us about could we onboard and then we we go through the proper onboarding process you know what strategy is interested in the ticket size what uh gp specifically do they have a wish list so a lot of them provide us with a wishlist of here are the gps that i would like any fund that you have by this gp please send it or i'm looking to upsize this specific fund and so we put that into our database and then they get informed whenever an opportunity fits their criteria and then they get invited to a process and so a lot of them they've never transacted as a buyer on the secondary market before and so their process is like initially dipping their feet into it putting in potential bids and then eventually they start winning more and more. Let's talk about the vision here because going from 2023 just about three years ago when you started to about a billion dollars worth of transaction volumes in a single year is pretty amazing, you know, growing alongside a market that is also growing. So where are you in five years? I mean, how do you think about the grand ambition? So the grand Ambition for us is all LP-leds to be happening on a platform. And we're the best platform out there, right? So there's no reason for an LP-lead process. So we're an individual LP or selling a fund or portfolio on the secondary market goes through the traditional investment banking process because by nature a secondary transaction is essentially price discovery an auction and closing and we do all three more efficiently so the price discovering process happens through our tech which is makes it much more dynamic and you can monitor throughout the fund's life the auction now all the buyers that are there are already onboarded so you can always be assured that you're getting competitive pricing and then closing is actually more efficient when it's done through the workflows we've developed than the traditional way A GP-led is different. GP-leads resemble an M&A transaction. They take a very long time to run. There's a lot of work that's done on the pricing. It's like in-depth underwriting. Those should be done through the traditional investment banks, whereas the LP-led, it's more efficient to do them on a platform. So our ambition is to have the entire LP-lead space be done through Tangible. I want to talk a little bit more about pricing now also because I got to look at some very interesting data that was produced by Tangible on what the discounts look like. When you looked at the areas of the market where there were the steepest discounts, it didn't run really in parallel with the market narratives that have been in the market for much of 2026. In fact, the data that's on your platform showed much more narrow discounts than what you saw in many publicly traded funds in terms of where they were trading relative to their net asset value. So the interesting thing is that despite what you hear today about issues facing private credit funds or large evergreen private credit redemptions, you would think that the secondary market pricing for that would also reflect kind of the retail shift towards redemption. But it's actually the opposite. There is so much appetite on the secondary marketplace for well-performing private credit managers. There's so much dry powder for it. So we actually see very disciplined pricing and in some ways the same or slightly higher pricing that what we saw last year. So private credit as an asset class has enormous appetite on the secondary market, whereas other things like venture and growth, you see higher discounts than you would have seen last year because of things like AI and how people are looking at their funds and saying, okay, which of these fund exposures that I have are more resilient to AI? Should I actually take advantage of the secondary market to reduce exposure so that I can redeploy into the AI names? What you typically see is that pricing is quite disciplined. It's going to become more and more disciplined as new entrants come in. Okay, so what is an average discount for the private credit industry looking like today? So private credit, senior secured, is anything from close to par to like 10 or low teen discounts. And we actually have done a lot of transactions on the evergreen funds that have been distributed to the wealth clients. And we Actually see that those are tracking very similarly to the large drawdown credit funds. So there's no real price differential. It's a strong case for the secondary market to be used as a tool by these large sponsors that manage these evergreen funds because it's a release valve. clients that can't get out through a traditional redemption process, if they know that they can use the secondary market, they're more likely to be satisfied LPs, whether or not they use it. Today, what's happening is that clients feel that they cannot redeem or that their redemptions are capped, and so they may feel frustrated. If they know they can get out to the secondary method as well, whether they use or not, at least they don't feel trapped. We believe that more and more evergreen funds are going to use the secondary market as a release valve and just as a way to temper the outflows. And in a way, it could mean that there could be less redemptions overall or that the fund doesn't need to use its own cash to provide for these redemptations. The moral of the story here for the private credit industry is that when you look at the actual discounts, it's not nearly as bad as what the market narrative had been suggesting this year when you look at the data. Venture capital is really interesting. So what is the typical discount for a venture-focused fund that does not have AI exposure? So discounts there, you would see discounts that are higher than 30%, sometimes higher than 40%. And it also depends on the vintages. So the vantages that invested at the peak of the market when interest rates were zero. So those suffered a bit more. Right into 2022, right before that precipitous rise. And so the marks haven't adjusted as quickly. And then also these companies that they've invested in had to catch up to their valuations. But we saw an improvement in pricing. So the pricing for the appetite for buyers like a couple of years ago for growth funds and venture funds was a bit lower than it is now. So part of this is the market, not just the underlying assets. The market, the number of buyers, the amount of dry powder raised. So because people saw it as an opportunity, they went and raised more money to buy venture secondaries. And because of that, now you have more competition. We just did a secondary transaction now with around 25 individual venture fund lines, early stage and later stage. And we were able to get six strong bids, much stronger than expected. So there's a market. So people are interested in buying at a discount because some of that fear is around, oh, well, it was bought at a high valuation and it doesn't have AI. A lot of the current holders might not know where this is going. So they're offloading, but there are an experience set of buyers on the other end that say, well we like these assets. They typically, when it comes to venture and growth, they're underwriting the winners in the portfolio and discounting completely the ones that they don't think are going to win. and they go really deep on underwriting the winners in the portfolio. So you have to be a specialist venture buyer to be properly pricing them. Even venture funds with AI in the Portfolio are also selling in the secondary market. So what does that look like? So we had a very interesting situation. You have LPs that because they've invested in AI names a few years ago, they now are overexposed as part of their asset allocation to this specific fund or this specific name and they want to reduce their exposure before IPOs because once something IPOs, it's no longer in there. So they're selling because things have been too good. Yeah. It's active portfolio management. Sometimes you want to produce exposure, take some money off the table. Sometimes you don't like it. You fell out of love with the GP. You fellout of lovewith this specificfund. Sometimes you're just... Overexposed on a name. There's a denominator effect. So when public markets go down, you have a higher exposure to alts. If you want to maintain this asset allocation, sometimes you use it. So there's a lot of reasons why people may use the secondary market. So are more individual investors getting excited about venture secondaries then? Because it is technically a way to get into pre-IPO names. You're seeing a lot of appetite, especially from family offices to invest in, you know, co-invests that have some AI names or even SPVs. So we do a lot OF these transactions. So when you think about the next wave of secondaries, you know, we've really highlighted here how you've been formulating what's a new market, really. But what comes next? At the very end of the day, this is one way for investors to manage liquidity and private markets. It sounds like the next wave has to do with lending rather than selling. So lending against existing positions. What does that look like today for you? So today, so the lending market is just as interesting. And a lot of times when a secondary sale doesn't make sense, a lending solution may make more sense. So then you can keep the asset. You keep, yeah, if you are more bullish about the asset, whereas the market discount might be slightly higher. And if also you've invested in highly diversified funds, fund of funds, then lending rates can be quite competitive. And you can get, you know, some, if you get a 20 to 30% loan to value against the portfolio of alts, and it's at a very interesting pricing, you can get the same outcomes that you would like to achieve in terms of liquidity. It may be more tax advantageous, and you still retain the upside on the assets. So we've been investing a lot in making lending also accessible to wealth clients. Today, lending for LPs that are borrowing, you know, 100 million, 200 million is readily available. There are a lot of lenders from the commercial banking industry or the private credit industry that offer great terms. We've been able to convince the same lenders to also lend smaller tickets by having them pre-underwrite funds, by showing them that the closing workflows could be standardized because a lot of the friction is not about the underlying collateral. It's more about what is the process of closing like? Do I have to interact with these smaller clients? So we make that easy. When you think about the future of the industry more broadly, I think it's hard to talk about private markets and not create a great degree of caution, right? Because these funds are not liquid funds, but there's more liquidity being created in this market. So how do you think about how liquid it actually gets in the end. The way we envision the market is that throughout the life cycle of a fund, there may be two or three owners. And that's how I believe LPs will start seeing it, is that when you commit to a fund whether it's an evergreen or a drawdown vehicle, you might be its first owner or its second owner or it's last owner. If you're the first owner, then you might get the most upside because you've put your confidence in the GP and that they're going to generate the highest return. They're picking the asset. It's a black box. And then the second owner might be an owner that wants lower risk, that has a shorter hold period timeline, and might pay money just so that they have exposure to these underlying assets year five when it's just going to the harvest mode. So you, as the first owner, make your return. The second owner makes maybe a lower return, but with lower risk. And dann the last owner is the owner that is specialized in Thailand who wants a very short hold period. And they're just kind of providing a very important function in the industry, which is not having the LP stay in these funds that can sometimes go up to 15 years in their life cycle. Right. It seems to me that this idea of liquidity management when it comes to private markets may be able to draw many more people into alternatives also, because there are just more tools between secondary sales and buying and between lending solutions, that there are going to be more tools in the toolkit for people over time. When we speak to RIAs today, and we ask them about what they're thinking about deploying into next year, like we have a lot of these conversations, they may have said to us, you know, we were more reluctant to invest in alternatives because of what we read in the news about evergreen redemption caps. But when we know that there's an option, that psychological barrier goes away. So I think one of the things that we provide is just this release valve function where LPs know that there's a secondary market, it's very efficient, and that you're getting the best price out there. And when you know that, you then are more confident about allocating to alts in general. I think when one underappreciated aspect of this too, and again, using the platform, you see this so clearly is actually how much data you have at the end of the day in order to make those decisions? The benefit of our platform is that we work with large wirehouses, also enterprise RIAs. So we may not have the largest transactions, but we have a high volume of them. And so a lot of the data price points and these like individual bids that we're getting, whether they close or not, are very valuable because they help enrich the LP's experience in understanding what the market sentiment is like, which is the first step. And one thing that's super important is that the lending capability is now enabled because the lenders know that there's a secondary market in case things go south. So lenders were reluctant to lend because they were like, okay, if I have to own this asset, what happens then? Now they know that they can sell it on the secondary market and we give them pricing information every quarter so that they know how much to lend against these assets. So ultimately, and it's interesting because I joined iCapital in late 2025 And I think, you know, within weeks, iCapital announced that they were taking a stake in Tangibles. So we were of the same iCapitel vintage in a lot of ways. What has that partnership meant for you guys at the end of the day? It's been great for me to see all the data from where I sit. It's super interesting to see the way people are buying and selling and why and what. But for you, you Know, what is this really done at the End of the Day? It's Been Enormous Validation of Our Business. It's been enormous validation also of the fact that alts have matured because the fact that alps are now becoming part of every RIA's, thanks to iCapital, part of every Ria's asset allocation and that these RIAs now may need or their clients may need a liquidity solution just shows you that alaps have grown, they've matured and now the same liquidity solutions that were available to institutional LPs are now available to the wealth clients. So they've been great partners because a lot of the clients that are these large banks, sometimes they deal with iCapital for their structured products, annuities, and on the primary alternatives. It's easier for them to deal with a company that has partnered with iKapital on the secondary liquidity side because they like to keep everything within the same ecosystem. So us integrating with icapital has been hugely beneficial to their clients, to us, to everybody involved. That's right, being able to use one platform for multiple points of a phone line cycle. And they're also like really nice people. So the fact that they're nice people that they are good to work with has been enormously helpful. Oh, Khalil, we try. Anyways, lovely to have you here today. Welcome back to New York. Thank you so much for joining us. Thank you. That is Khalil Hibri. He is the co-founder of Tangible Markets. Thank you.