This chart from Hedgebay shows the full history of secondary hedge fund transactions (that Hedgebay has in their database). The discount, which seems to be permanent for now indicates the liquidity premium one would demand to go into a fund that is presumably locked (via a lock-up, a gate, or a general redemption suspension).
Some of the discount may be valuation uncertainties, but with all the scrutiny on hedge funds these days, most valuation uncertainties would have been vetted with third parties. If they haven't been, no one would buy such fund even at a 10-15% discount.
Such liquidity premium means that funds who provide the best liquidity terms (within their strategy category) will be able to raise more capital than those who have long lock-ups and sidepockets.
It's somewhat of a dangerous game because this may create an asset-liability mismatch. That is funds will offer unrealistic liquidity terms just to get the capital in the door. As assets become fully priced and rates continue to stay low, hedge funds will be pressured to seek out less liquid strategies to squeeze out incremental returns. They may deploy leverage, making less liquid investments even more illiquid. The liquidity of the portfolio will become "mismatched" with the liquidity terms for redemptions (the liability side).
And when redemptions increase, funds will put up gates and we are back where we started. As much as institutions, particularly funds of funds seek the liquidity holy grail, these investments are not mutual funds, and the most "investor-friendly" liquidity terms may not provide the investor protection these institutions expect.
SoberLook.com