While secondaries have been one of the fastest growing segments of the private equity market for more than a decade, we expect that further demand for liquidity, along with renewed macroeconomic uncertainty and recent market volatility, will continue to create attractive opportunities for seasoned secondaries investors in the current environment.

In this paper, we discuss why we believe current market conditions will continue to benefit secondary buyers. Given the size of the market, the increased portfolio management by limited partners (LPs), and the establishment of general-partner-led (GP-led) transactions, we expect the positive impact from current uncertainty and volatility to be much larger than in prior secondary cycles.

  • Record secondary volume: New records were set in 2024, driven by both LP and GP-led transactions.
  • Long-term and near-term growth support: Secular support remains in place, while secondaries are seen as the potential solution to the industry’s prolonged lack of exit liquidity.
  • Continuing growth in GP-led secondaries: We see further adoption as GPs realize they can hold onto star assets while making much needed distributions to investors, and LPs recognize the attractive return potential as supported by the latest data that appear to confirm that GP-led transactions can generate buyout returns with lower risk.
  • Undercapitalization relative to demand: Secondary fundraising has been strong, but not strong enough to keep pace with the growth in transaction volumes, resulting in attractive supply-demand dynamics for secondary buyers.
  • Attractive Pricing: The supply-demand balance keeps pricing attractive relative to long-term averages; we observe pockets of value in high quality LP and GP-led transactions.
DOWNLOAD THE FULL PAPER