Nearly two thirds of private equity activity in Europe involved one buyout firm selling a company it owns to another fellow buyout firm. This worries many investors that many of these firms are just recycling deals in order to generate fees for their management services.

According to industry tracker Preqin, about 65% of deals in 2013 worth US$19.3 billion have been done in the so-called secondary market. This is a higher rate compared to the last seven years, with only 41% from 2012 was between and among funds. The increase leads many to believe that private equity managers are finding it difficult to find new investors and investment opportunities in Europe, since sellers have fewer routes to get out of deals available.

The secondary market is about buyout fims flipping companies between one another instead of selling them to trade buyers or having them listed in the stock exchange. It would be more sensible if one sells to another private equity house if one has more resources for expansion purposes. This though is becoming increasingly unpopular with investors as there may be not much left to earn after an asset is acquired for another or multipe times.