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At record highs, does the secondary market have room for further growth?

May 7, 2026 | 6 min read

Over $225 billion of private market secondaries closed in 2025, an over 40% increase on the prior year’s volume and an all-time high.¹ Here we examine key questions that we are hearing from investors about the opportunity in secondaries, the market’s current temperature, and the key drivers behind the asset class’s continued expansion.

Secondaries volumes exceeded $225bn in 2025², an all-time high. What are the key forces driving this rapid growth?

Liquidity conditions in private markets have been depressed for several years, with the proportion of NAV being distributed being below trend for four years. This caused a build-up of NAV and led many LPs to sell positions to manage exposures, free up investing capacity, or generate cash.

GPs are also under pressure to distribute to LPs, meaning continuation funds have been an attractive option to generate liquidity while retaining exposure to resilient assets.

Given a lot of activity seems to be driven by challenging market conditions, what would happen to secondary volumes if exit markets were to re-open?

2021 is a good comparison, as IPO and M&A volumes were high, while the secondary market also reached record activity. Secondaries are now an accepted portfolio management tool for both LPs and GPs and we have seen many repeat sellers in the market across different points in the cycle.

How is secondary pricing being impacted by current market conditions? And how important is this to overall secondary performance?

The current geopolitical environment, coupled with heightened AI threat, public market repricing of software and exit market uncertainty have led to the moderation of pricing in the secondary market and an increased focus on high quality mid-market companies and funds – which have significantly more routes to exit – as well as defensive sectors.

I would, however, also highlight that there are, broadly speaking, two ways to generate returns in secondaries: the initial discount at purchase, and the appreciation of assets after acquisition. In our view, a discount-driven strategy is risky in slow exit markets, as it relies on swift liquidity to monetize the discount. Buying fundamentally sound and resilient assets – even at optically higher prices – offers more optionality to generate returns.

Are continuation funds primarily a liquidity generation tool or are there other reasons for GPs to consider doing these deals?

While many GPs did their first continuation fund transaction during the Covid pandemic to generate Distributions to Paid-In Capital (DPI) while exit markets were closed, there are attractive features to these deals, aside from generating liquidity for LPs. CVs offer a solution for GPs to continue their journey with some of their highest- performing or promising assets, providing additional time and capital to further compound value. As a result, we have now seen many GPs complete multiple CVs, given their positive experience in prior deals.

How are continuation vehicle transactions being used as an exit route for existing continuation vehicles, and how are these deals viewed?

CVs of CVs – or so-called CV squareds – can make sense for the right company. If a company has performed well across an initial buyout and a CV, it is calibrated under the GP’s ownership and could be well poised to continue its value creation plan.

There are, however, relevant questions that investors should ask. If the asset has now outperformed twice, it may have grown in size beyond the market segment in which the GP has been successful historically. Similarly, larger deals may be dependent on the IPO market as an exit route, which introduces more risk.

Several buyout managers have entered the secondary market through continuation vehicles. What impact has this had on competitive dynamics?

It‘s a positive for the secondary market that new parties, including sophisticated managers, recognize the attractive opportunity set. In our view, the market for single-asset CVs has been the most under-capitalized part of the market, as many diversified funds deploy limited amounts into these deals. The entrance of new participants reduces that pressure and should lead to faster book builds, particularly for larger transactions and should contribute to further market growth.

How are secondaries developing across other private market asset classes, given the rapid growth of activity beyond private equity?

Private equity is the largest and most mature part of the secondary market for private funds. Historically we saw opportunistic transactions in other assets classes but these markets are exploding, with the market for infrastructure secondaries growing from $3bn in 2015 to $20bn in 2025³. Private credit secondaries have grown over an even shorter period of time, also reaching $20bn in activity last year.⁴

Investing in both via secondaries introduces attractive structural features, which can accelerate and enhance potential returns. Given the differentiated risk/return profile of these strategies, we expect to see increasing numbers of limited partners create dedicated allocations to them.

There has been rapid growth in the number of evergreen secondary solutions. How has this impacted the market?

To date, it has been limited, as most vehicles are small compared to closed-ended funds and generally invest alongside a flagship program. Evergreens are not yet sufficiently scaled to participate at the larger end of the market, but we expect them to grow as new markets open up to fundraising. We have also seen interest in evergreens from institutions, suggesting the operational benefits are as interesting as the potential for liquidity.

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How is the secondaries market expected to evolve over the next few years?

The trends that have grown the secondary market to $225bn of transaction volume in 2025⁵ are largely secular, and we expect them to continue to grow the size of the market and the types of investors who participate. In the shorter term, we believe the liquidity environment will drive new sellers into secondaries, both LPs and GPs, and many will become repeat sellers. Given the growth in secondaries in newer asset classes, we expect those markets to reach comparable turnover rates to PE in the medium term. In turn, we believe this will lead many LPs to view secondaries as a structurally attractive way to add exposures to their portfolios across strategies.

Footnotes

As December 31, 2025. Source: Evercore 2025 Secondary Market Survey Results
As December 31, 2025. Source: Evercore 2025 Secondary Market Survey Results
Source: Campbell Lutyens, February 2026
Source: Evercore 2025 Credit Secondary Market Survey
As December 31, 2025. Source: Evercore 2025 Secondary Market Survey Results

Disclosure

Dislcaimer

Diversification does not ensure a profit or protect against a loss.

HarbourVest Partners, LLC is a registered investment adviser under the Investment Advisers Act of 1940. This material is solely for informational purposes and should not be viewed as a current or past recommendation or an offer to sell or the solicitation to buy securities or adopt any investment strategy. The opinions expressed herein represent the current, good faith views of the author(s) at the time of publication, are not definitive investment advice, and should not be relied upon as such. This material has been developed internally and/or obtained from sources believed to be reliable; however, HarbourVest does not guarantee the accuracy, adequacy, or completeness of such information. There is no assurance that any events or projections will occur, and outcomes may be significantly different than the opinions shown here. This information, including any projections concerning financial market performance, is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. The information contained herein must be kept strictly confidential and may not be reproduced or redistributed in any format without the express written approval of HarbourVest. Nothing herein should be construed as a solicitation, offer, recommendation, representation of suitability, legal advice, tax advice, or endorsement of any security or investment and should not be relied upon by you in evaluating the merits of investing in HarbourVest funds or any other investment decision.

An investment in the private markets involves high degree of risk, and therefore, should be undertaken only by prospective investors capable of evaluating the risks of the Fund and bearing the risks such an investment represents. The following is a summary of only some of the risks of investing in private markets.

Secondary Investing Risks.

Secondary market transactions may impose higher costs than other investments and may require a fund to assume contingent liabilities associated with events occurring prior to the Fund’s investment. The overall performance of an Underlying Portfolio Fund acquired through a secondary transaction will depend in large part on the purchase price paid. In addition, a fund will generally not have any ability to negotiate terms with respect to interests in Underlying Portfolio Funds invested in through secondary market transactions.

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For the purposes of paragraphs (k) to (n) above:

“relevant date” means the date on which the advertisement, invitation or document (made in respect of securities or structured products or interests in any collective investment scheme, which is intended to be disposed of only to professional investors), is issued, or possessed for the purposes of issue;
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(a) the Singapore Government;

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(k) an approved exchange;

(l) a recognised market operator;

(m) an approved clearing house;

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(o) a licensed trade repository;

(p) a licensed foreign trade repository;

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(i) an individual —

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(C) whose income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;

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(A) the most recent audited balance sheet of the corporation; or

(B) where the corporation is not required to prepare audited accounts regularly, a balance sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance sheet, which date must be within the preceding 12 months;

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(iv) A trustee of a trust which the subject matter exceeds S$10 million; or

(v) An entity (other than a corporation) with net assets exceeding S$10 million (or its equivalent in a foreign currency) in value. “Entity” includes an unincorporated association, a partnership and the government of any state, but does not include a trust; or

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(vii) A corporation which the entire share capital is owned by one or more persons, all of whom are accredited investors.