The secondary private equity market has entered a new era, one defined by scale, sophistication and structural permanence. With $240 billion of transaction volume in 2025, up nearly 48% over the prior year’s record of $162 billion,1 and GP-led transactions becoming a major liquidity tool across private markets, the opportunity set for secondary investors has never been larger or more diverse.
For asset allocators seeking return enhancement, portfolio diversification and improved liquidity management within their private markets programs, secondaries represent one of the most compelling opportunities available today. But in a market defined by complexity and uncertainty, where alpha can be generated by relationships, experience and rigorous underwriting, we believe manager selection is a primary consideration.
Structural Tailwinds That Endure
The secondary market’s rise appears structural rather than cyclical, underpinned by durable, long-term forces.
The sheer scale of private equity creates an ever-expanding opportunity set. The combined NAV of private market funds reached $14.5 trillion by the end of 2024—nearly double the $7.4 trillion recorded in 20192—creating a vastly larger pool of assets with the potential to be offered into the secondary market. As this NAV grows, so too does the supply of secondary investment opportunities. Despite the secondary market growing approximately fourfold since 2014, secondaries trading remains low at just 1 – 2% of total private markets NAV.2 Even a modest increase from these historically low turnover levels would have a substantial impact on transaction volume, and as LPs become more active in managing their private markets holdings and GPs more sophisticated in managing investor cash-flow needs, that proportion is likely to rise regardless of the broader exit and liquidity environment.
GP-led secondaries have been the defining growth driver. A segment that barely existed 10 years ago now represents nearly half of all secondary transaction volume, growing at a 30% CAGR from 2017 to 2025.1 This is not a temporary trend. It reflects a fundamental and permanent shift in how private equity sponsors manage their portfolios, create liquidity for investors and extend ownership in their highest-conviction assets. In 2025, continuation vehicles represented 14% of all sponsor-backed exit volume,1 cementing their status as a permanent fixture in private markets.
From a buyer’s perspective, GP-led transactions offer compelling investment opportunities: the ability to invest alongside a GP in their best assets, with years of performance history already on the table, at valuations that reflect a liquidity premium rather than a full change-of-control price. GPs typically invest significant personal capital into the transaction, creating strong alignment of interest.
Why Now Could Be an Attractive Entry Point
Beyond the structural case, we view the current market environment as presenting a favorable window for new secondary capital.
In recent years, exit pathways (IPOs, M&A, and sponsor-to-sponsor sales) have been severely constrained. PE exit activity remains more than 50% below 2021 peaks, and distributions as a percentage of NAV have fallen to historic lows.3 With liquidity pressure mounting, many investors find themselves overallocated to illiquid assets, creating a growing cohort of motivated sellers and attractive opportunities for buyers. Macroeconomic uncertainty, including geopolitical tensions, tariff risk and equity market volatility, is also expected to widen discounts and increase motivated selling, particularly among LPs with near-term liquidity needs.4
The secondary market also remains significantly undercapitalized, creating attractive supply-demand dynamics. Secondary dry powder stands at approximately $215 billion, representing roughly one year of transaction volume,5 a fraction of the three to four years of coverage typical in the primary market. For context, secondary fundraising has been stronger than other private asset classes with closed-end secondary vehicles representing 18% of all private capital raised in 2025, up from just 7% in 2021.1 However, supply of transactions continues to outpace capital formation.
Attractive Choice for Asset Allocators
For investors, the case for secondaries extends beyond return potential. Secondaries can offer a distinct set of portfolio construction advantages that are difficult to replicate through primary fund investing.
Secondary investments begin with assets already in motion, compressing the J-curve and delivering faster, more visible paths to distribution than primary fund commitments can offer. A single secondary portfolio will invest in multiple underlying funds across multiple vintages and industries, providing immediate diversification that would take a primary program years, and multiple commitment cycles, to replicate. Critically, buyers are not making blind bets; secondary investments are underwritten against real assets, real financials and real GP track records, replacing the uncertainty of a primary commitment with informed, asset-level conviction. Taken together, these attributes represent what we see as a uniquely additive role for secondaries in a diversified private markets program; not merely as a return enhancer, but as a tool for managing risk, pacing and portfolio resilience. For investors, secondaries increasingly serve not as a satellite exposure, but as a core component of a well-constructed private markets program.
Manager Selection: A Primary Consideration for Generating Alpha
Access to the secondary market is not itself a strategy. In our view, how one participates matters enormously.
Neuberger Berman's secondary team brings nearly 30 years of experience navigating market cycles, building a track record of successfully sourcing, leading and executing attractive secondary transactions. Underpinning that track record is the breadth of Neuberger’s private markets platform. With over $155 billion in AUM6 spanning primary fund investing, secondaries, co-investment, private debt and capital solutions, Neuberger maintains vast GP and LP relationship networks and deep private market knowledge and insight. The significant scale of the Neuberger platform is evident, with over $35 billion of capital committed over the past three years.7
Our experience suggests this combination of deep relationships, rigorous underwriting and platform scale translates directly into successful execution; in a market defined by uncertainty, we are convinced those qualities are what drive outcomes.
