Meta Description: Private market secondary deal volume hit a record $226 billion in 2025 — up 41% year-over-year. Learn why the secondaries market is booming, how LP-led and GP-led deals work, what continuation vehicles mean for investors, and where the market is heading in 2026 and beyond.
Focus Keyword: secondary markets private equity record volume 2025 2026
Introduction: The Market That Solved Private Equity’s Liquidity Problem
Private equity has always had a fundamental tension at its core: the investments it makes are illiquid by design, locked into funds that typically run for ten years or more, yet the investors who commit capital — pension funds, endowments, sovereign wealth funds, and increasingly high-net-worth individuals — have real-world liquidity needs that do not pause for a fund’s lifecycle.
The secondary market for private assets exists precisely to resolve this tension. It is the marketplace where existing private fund interests are bought and sold — allowing investors who need liquidity to exit before a fund winds down, and allowing new investors to enter mature portfolios with known track records at potentially attractive valuations.
In 2025, this market did something it had never done before: it crossed the $200 billion threshold for the first time, reaching a record $226 billion in total transaction volume — a 41% increase over 2024, which was itself a record year. The secondary market has grown from just $26 billion in 2013 to $226 billion in 2025. That is not incremental evolution. It is a fundamental transformation in how private capital is managed, distributed, and recycled across the global financial system.
This article explains what drove that record, how the two main segments of the market work, what the outlook for 2026 looks like, and what it all means for institutional investors, wealth managers, and the expanding universe of retail participants entering private markets.
$226B
Record secondary market volume in 2025 — first time crossing $200B threshold
41%
Year-over-year increase — 2024 was itself a record year
$120B
LP-led transaction volume in 2025 — up ~35% YoY
$106B
GP-led transaction volume in 2025 — up 51% YoY
Understanding the Secondary Market: A Primer
Before examining what drove 2025’s record numbers, it helps to understand exactly what the secondary market is — and is not. Secondary transactions in private markets are fundamentally different from secondary trading in public equities. When you buy Apple shares on the New York Stock Exchange, you are participating in the secondary market for public equities: Apple receives no new capital from that transaction. The same logic applies to private market secondaries, but with critically different structural features.
In a private market secondary transaction, an existing investor — typically called a limited partner (LP) — sells their stake in a private fund or a specific portfolio company to a new buyer, typically a dedicated secondary investment fund or another institutional investor. The original fund manager — the general partner (GP) — does not receive new capital from this transaction, but the LP receives immediate liquidity and the new buyer acquires exposure to a seasoned portfolio.
Today, the market broadly divides into three transaction types:
LP-led secondaries
The original and still-dominant form. An LP sells existing fund interests, often across a broad portfolio of dozens or hundreds of fund positions. These transactions typically run through competitive auction processes managed by specialist secondary advisors. In 2025, LP-led volume reached $120 billion — up approximately 35% year-over-year. Major sellers included prominent US university endowments, state pension plans, and sovereign wealth investors — institutions rebalancing portfolios, meeting liquidity needs, or optimizing their private market allocations.
GP-led secondaries and continuation vehicles
The fastest-growing and most structurally innovative segment. In a GP-led transaction, a fund manager transfers one or more portfolio assets from an existing fund into a new continuation vehicle — giving existing LPs the option to either take cash and exit or roll their stakes forward into the new vehicle. In 2025, GP-led volume reached $106 billion, up 51% year-over-year.
Continuation vehicles have become one of the most significant structural innovations in private capital markets. They now represent approximately one in five sponsor-backed private equity exits — a remarkable figure that underscores how deeply this structure has been embedded in the exit toolkit of major fund managers. In a market where IPOs remain depressed and M&A activity has been uneven, continuation vehicles give GPs a way to extend holding periods on their best assets, capture additional value creation, and distribute capital to LPs who need it — all without a forced sale at an inopportune moment.
Structured and complex secondaries
A growing subcategory includes NAV-based lending, preferred equity transactions, and hybrid structures that combine elements of primary commitment with secondary liquidity. A notable 2025 development highlighted by Akin Gump was the rise of “CV-squared” transactions — continuation vehicles built on top of existing continuation vehicles — reflecting how far structural innovation has advanced in this market.
Scale context: Despite record volumes, the secondary market still represents only approximately 5% of global buyout assets under management — currently around $4 trillion. The theoretical ceiling for secondaries activity is vastly larger than the current market, which is one reason analysts are projecting continued strong growth for years to come.
What Drove the 2025 Record: Six Converging Forces
1. The IPO drought and exit bottleneck
The most fundamental driver of secondary market growth is structural: the traditional exit routes for private equity — initial public offerings and corporate mergers and acquisitions — have been constrained for an extended period. IPO windows have been narrow and unpredictable since 2022. The result is a massive backlog of private equity holdings that have matured beyond their original holding period without finding a conventional exit path.
Secondary markets have filled this vacuum. For LPs who committed capital to funds that were supposed to return cash within a ten-year window, secondaries provide the only available liquidity mechanism. For GPs managing those funds, continuation vehicles provide a way to hold their best assets past the fund’s scheduled termination date while still distributing capital to LPs.
2. LP portfolio optimization and rebalancing
The secondary market is no longer just a distress mechanism for LPs who need emergency liquidity. It has matured into a mainstream portfolio management tool. “Limited partners have taken liquidity into their own hands through strategic sales of their portfolios,” as Nigel Dawn, Global Head of Evercore Private Capital Advisory, observed in January 2026. LPs are using secondaries proactively — to rebalance overweight private market allocations, to concentrate exposure in their highest-conviction managers, and to generate the distributions they need to meet spending requirements and new fund commitments.
This maturation of the LP mindset is arguably the most significant structural driver of secondary market growth. When the market was primarily a distress tool, volumes were capped by how much distress existed. When it becomes a standard portfolio management instrument, the potential volume is vastly larger.
3. GP adoption of continuation vehicles accelerating
The 2026 Global Private Equity Outlook survey found that 46% of respondents are utilizing GP-led secondaries or continuation vehicles — nearly double the number from the previous year’s survey. Adoption plans are even more striking: more than 55% of APAC respondents and 51% of North American respondents plan to increase their use of GP-led secondaries in the next 24 months, compared to just 10% and 22% respectively a year earlier.
GPs are embracing continuation vehicles for a straightforward economic reason: they allow sponsors to retain ownership of trophy assets beyond a fund’s scheduled end date, capturing additional upside that would otherwise be foregone in a premature forced sale. As Hamilton Lane’s internal data shows, the median single-asset continuation vehicle priced at 99.5% of NAV between Q4 2022 and Q2 2025 — effectively at fair value — making them attractive to both sellers and buyers.
4. Rising pricing and narrower bid-ask spreads
One of the most important signals of market maturation is pricing improvement. In 2022, LP-led buyout fund stakes were selling at less than 90% of net asset value — meaning sellers were accepting significant discounts to access liquidity. By the first half of 2025, that discount had largely evaporated: buyout private equity stakes were trading at approximately 94% of NAV. This pricing improvement reflects both increased buyer competition and improved confidence in private market valuations.
Narrower bid-ask spreads reduce the friction of secondary transactions — making them more attractive to sellers who previously balked at deep discounts. As spreads tighten, more potential sellers who were waiting for better pricing enter the market, increasing deal flow.
5. Record dedicated secondary capital
The supply side of the secondary market — the capital available to buy fund interests — has also hit record levels. Dedicated secondary capital reached $327 billion in 2025, a 14% increase from year-end 2024. When combined with capital from traditional LPs and available leverage, total secondary market dry powder reached approximately $477 billion. Three of the ten largest private equity funds closed in 2025 were secondary-focused vehicles, reflecting the scale of institutional appetite for the strategy.
Major managers are actively raising their next generation of secondary funds: Lexington Partners, Blackstone, and HarbourVest are all on the fundraising trail with vehicles targeting $20 billion or more each — a combined target of $67.5 billion across three funds alone.
6. Diversification beyond private equity
The secondary market has historically been dominated by private equity. In 2025, while PE continued to represent 81% of LP-led and 77% of GP-led volume, the diversification into other asset classes accelerated meaningfully. Private credit secondaries achieved record fundraising and transaction activity. Infrastructure secondaries gained traction. Venture capital secondaries expanded. This diversification broadens the market’s base and creates new pools of potential deal flow that were barely accessible five years ago.
The 2026 Outlook: Path to $300 Billion
The trajectory for 2026 is firmly positive. Jefferies projects a path for annual secondary market volume to approach $300 billion over the next 12 to 24 months. William Blair’s 2026 Secondary Market Report forecasts volume of $250 billion in 2026 alone. Based on transaction backlog alone, Jefferies expects first-half 2026 volume to exceed $100 billion — setting up another record full-year performance.
The structural drivers that produced 2025’s record are not going away. The IPO market remains challenging. The backlog of unsold private equity assets continues to build. GP adoption of continuation vehicles is accelerating, not moderating. And the retail investor access reforms described elsewhere in this series — INVEST Act, ELTIF 2.0, interval funds — are bringing new capital into the secondary market through evergreen vehicles that now account for an estimated $113 billion of annual secondary market capital inflows.
2026 forecast summary: William Blair projects $250 billion. Jefferies sees a path to $300 billion within 12–24 months. First-half 2026 volume alone is expected to exceed $100 billion. In excess of $100 billion in new secondary fund commitments is expected to be raised globally in 2026.
The Governance and Alignment Question
As the GP-led segment has grown, so has scrutiny of the governance frameworks around continuation vehicle transactions. The concern is structural: in a GP-led deal, the GP is simultaneously the seller (transferring assets from an old fund) and the buyer (acquiring them for the new vehicle) — creating an inherent conflict of interest. Existing LPs must decide whether to cash out or roll forward, often on compressed timelines and with limited information about how the GP has valued the transferred assets.
Regulators and institutional investors are demanding more robust governance frameworks. The market standard that has emerged requires: a competitive market test of value (not simply a GP-determined transfer price); full GP economic rollover as a signal of conviction; sufficient time and information for LPs to make informed decisions; and prudent leverage structures in the new vehicle.
Akin Gump’s 2026 perspective on the market identifies governance, alignment, and transparency as the central themes emerging as continuation vehicles mature. The rise of “CV-squared” transactions — continuation vehicles on top of continuation vehicles — is particularly scrutinized, as each layer of restructuring creates additional complexity and potential for misalignment.
Approximately 49% of US investors and 43% of European investors who participated in a continuation fund close subsequently committed primary capital to that sponsor’s successor flagship fund — suggesting that well-governed continuation vehicles are successfully building LP confidence rather than eroding it.
Technology’s Role: AI and Data in Secondary Transactions
As the secondary market scales to hundreds of billions in annual volume, the operational demands of processing, evaluating, and closing transactions have grown exponentially. Technology — and specifically artificial intelligence — is being deployed to meet this challenge.
AI tools are now applied across controversy screening (identifying reputational or ESG risks in portfolio companies), ESG data analysis and emissions estimation where direct disclosures are unavailable, and portfolio analytics that enable buyers to evaluate large LP portfolios containing hundreds of individual fund positions. What previously required weeks of manual due diligence can now be partially automated, compressing transaction timelines and allowing secondary buyers to evaluate more deals with the same team resources.
Technology is also enabling the scaling of operations for secondary advisors and fund administrators. The volume growth from $26 billion in 2013 to $226 billion in 2025 — a nearly nine-fold increase in twelve years — would have been operationally impossible without corresponding improvements in data infrastructure and analytical tools.
What This Means for Different Investor Types
| Investor Type | Secondary Market Role | Key Opportunity | Primary Risk |
|---|---|---|---|
| Institutional LPs (pensions, endowments) | Sellers and buyers; portfolio management tool | Liquidity, rebalancing, concentration management | Governance of GP-led deals; valuation complexity |
| General Partners (PE firms) | Continuation vehicle sponsors | Extended holding of trophy assets; DPI improvement | LP confidence; regulatory scrutiny of conflicts |
| Secondary Fund Managers | Primary buyers of LP stakes and CV interests | Buying mature portfolios at potential discounts | Competition driving pricing up; deployment pressure |
| High-Net-Worth / Retail | Indirect access via interval funds and evergreen vehicles | Access to seasoned portfolios with known track records | Illiquidity; complexity; valuation opacity |
| Wealth Managers | Advisors allocating to secondary-focused funds | Diversification; potentially lower J-curve effect | Client education on structure complexity |
The J-curve advantage for secondary buyers
One of the most compelling investment characteristics of secondary market funds — particularly relevant as retail investors gain access — is the reduced J-curve effect. Traditional private equity funds typically show negative returns in their early years as management fees are paid out before investment returns materialize. Secondary funds, which acquire stakes in mature portfolios that are already generating distributions, typically show a much shallower J-curve — meaning investors see positive returns earlier in the fund lifecycle. This characteristic makes secondary funds more suitable for retail investors who may have shorter patience for the extended negative return periods of primary PE funds.
Key Takeaways
- Secondary market transaction volume hit a record $226 billion in 2025 — up 41% year-over-year and crossing the $200 billion threshold for the first time, according to Evercore Private Capital Advisory data.
- LP-led volume reached $120 billion (up ~35%) and GP-led volume reached $106 billion (up 51%) — the market is now nearly evenly split between the two segments.
- Continuation vehicles now represent approximately one in five sponsor-backed PE exits — cementing GP-led secondaries as a recognized fourth exit route alongside IPOs, M&A, and secondary buyouts.
- Dedicated secondary capital reached $327 billion in 2025; total available capital including leverage approaches $477 billion — more than sufficient to support continued volume growth.
- Buyout PE stakes traded at approximately 94% of NAV in H1 2025, up from below 90% in 2022 — a signal of market maturation and improved investor confidence.
- William Blair projects $250 billion in 2026 volume; Jefferies sees a path to $300 billion within 12–24 months; H1 2026 volume alone is expected to exceed $100 billion.
- Governance, alignment, and transparency are becoming central concerns as GP-led continuation vehicles proliferate — requiring robust market testing, full GP economic rollover, and adequate LP decision time.
- The market has grown from $26 billion in 2013 to $226 billion in 2025 — an 8.7x increase in twelve years, driven by structural changes in how private capital is managed and recycled.
Conclusion: Secondary Markets as the New Backbone of Private Capital
The secondary market’s transformation from a niche liquidity mechanism to a $226 billion global marketplace is one of the most consequential structural developments in private capital over the past decade. It has solved the liquidity problem that was always private equity’s Achilles heel — not by eliminating illiquidity, but by creating a functioning, liquid market for the exchange of illiquid interests.
The forces that produced 2025’s record volume are structural and durable. Companies are staying private longer, creating more secondary supply. LPs have embraced secondaries as a portfolio management tool, not just a distress exit. GPs have adopted continuation vehicles as a legitimate exit route, not a last resort. And an expanding wave of retail-accessible vehicles — interval funds, evergreen structures, ’40 Act funds — is bringing new capital into the secondary market from an investor category that barely participated five years ago.
The path to $300 billion in annual volume is not a speculation. Based on the trajectory of supply drivers, buyer capital availability, and structural adoption rates, it appears more a matter of when than if. For investors at every level — institutional and retail, general and limited partners — understanding the secondary market is no longer optional. It is essential to navigating the private capital landscape of 2026 and beyond.
This article is for informational and educational purposes only. It does not constitute investment advice. Private market investments carry significant risks including illiquidity, valuation uncertainty, and complexity. Consult a qualified financial advisor before making investment decisions.
Tags: Secondary Markets Private Equity 2025 2026 · $226 Billion Record Volume · LP-Led Secondaries · GP-Led Secondaries · Continuation Vehicles · Private Fund Liquidity · Evercore Secondary Market Report · Jefferies Secondary Review · William Blair Secondaries · Private Credit Secondaries · Infrastructure Secondaries · Secondary Market Outlook 2026 · Interval Funds · J-Curve Private Equity · Private Capital Exit Routes