
Enhancing Diversified Secondaries with a Complementary Allocation to
GP-led Single-Asset Funds
- Strategy insight
September 8, 2025 | 8 min read
After a record-breaking 2024 in the secondary market where transaction volume reached $160 billion, 2025 is on track to be even higher with H1 2025 volumes already topping $102 billion.1 GP-led transaction volume, including GP-led single-asset continuation vehicles (SACVs), also scaled to new highs, providing general partners (GPs) and limited partners (LPs) with highly flexible liquidity and portfolio management solutions that are helping navigate a more complex investing and return backdrop.
As investors increasingly look for ways to optimize portfolio construction across parts of the secondary market, we explore how a potential strategic allocation of 10-20% to a SACV-oriented fund, coupled with a core allocation to a diversified secondary program, may offer a compelling opportunity to enhance returns, manage risk, and create value.
The rise of GP-led single-asset continuation vehicles
Continuation vehicles allow GPs to retain ownership of high-performing assets beyond the traditional fund lifecycle, offering liquidity to existing LPs while bringing in new capital to support continued value creation. GP-led continuation vehicles, both single-asset and multi-asset, accounted for 44% of the entire secondary market in 2024, with SACVs alone growing to represent about 20% of total secondary market volume.2
Secondary market volume breakdown
Sources: Evercore Private Capital Advisory, FY 2024 Secondary Market Review, dated February 2025, data included within the chart is as of December 31, 2024.
SACVs are distinct from both more diversified multi-asset continuation funds and LP-led transactions in that they offer more concentrated exposure to “trophy” assets. Because SACVs seek to offer exposure to a well-performing, high-quality company with a demonstrated management team and growth trajectory, funds focused on single-asset GP-led transactions can help investors build a curated portfolio with some of the highest-quality assets available in private markets today.
A key feature of SACVs and other GP-led transactions is their ability to align incentives between GPs and secondary investors. GPs typically roll a significant portion of their crystallized carried interest, sometimes alongside fresh capital, into the new vehicle. It is common for GPs to represent 5% to 10% of a continuation fund’s total commitments—showing strong conviction in the asset’s future performance.3 This alignment, combined with continuity of the existing GP and company management team, who also tend to “rollover” a significant portion of their equity, positions SACVs as a high-conviction, high-return segment of the secondaries market.
Complementing diversified secondaries with concentrated alpha
The composition of a diversified secondaries portfolio can vary widely across managers in terms of weightings across LP-led and GP-led deals. On one hand, these funds generally provide exposure to a range of vintages, sectors, geographies, and underlying managers, helping to mitigate idiosyncratic risk and smooth returns. On the other hand, this diversification may underweight exposure to SACVs and the high-quality assets found in single-asset deals.
Many diversified secondary fund programs have caps on exposure to single-asset transactions that are meaningfully below the current market weighting of approximately 20%. While these caps are intended to ensure appropriate fund-level diversification, they generally lead to diversified programs having an undersized allocation to single-asset investments, which may reduce alpha potential.
Introducing a strategic allocation focused on SACVs to a core portfolio of diversified secondaries can address this limitation by injecting a potential layer of concentrated alpha while also building a portfolio that more closely mirrors the transaction activity in the secondary market overall.
As the SACV market has matured, we have seen the promise of strong performance play out in transaction data. Namely, SACVs have demonstrated the ability to generate MOICs that are commensurate with or exceed those of standard buyout investments with similar levels of downside risk. As illustrated below, first-quartile SACV MOICs have historically been higher than that of buyout, while median and third-quartile SACV performance has been comparable or slightly better.
Net MOIC by transaction type
Source: Morgan Stanley Private Capital Advisory, The Case for Continuation Funds: An Updated Review of Initial Performance, March 2025. First quartile boundary (“Q1”), median, and 3rd quartile boundary (“Q3”) return benchmarks are calculated using Preqin performance data. All data represents relevant funds with vintages between 2018 and 2024. Past performance is not a guarantee of future results.
The compelling risk-reward profile for SACVs can be attributed to several characteristics. SACVs inherently benefit from the positive selection bias that comes from the sponsor electing to “double down” on high-performing assets they know exceptionally well. This continuity of GP ownership also means there is no potential disruption from a change of control. Additionally, the sponsor’s value creation plan for the company is confirmed through underwriting by secondary investors. Overall, the alpha generation potential of SACVs can make them a valuable complement to a diversified secondary allocation.
Considerations and execution
Aside from the portfolio construction considerations and structural characteristics examined above, the current macro environment has created an especially attractive backdrop for SACVs. Despite secondary volumes rising over the past several years, exit volume more broadly has declined and remains under pressure with geopolitical events and tariffs dampening recovery expectations. Given the continued slower pace of exits, GPs are increasingly utilizing SACVs as a means to hold on to their best assets while providing a liquidity option for existing LPs—further widening the opportunity set for SACV investors.
While the benefits are clear, investing in SACVs requires specialized capabilities. Due diligence must shift from fund-level analysis to asset-level underwriting, demanding a deep understanding of the company’s financial performance, market position, and growth potential. Moreover, the concentrated nature of these investments necessitates a robust monitoring framework.
To mitigate these challenges, we believe it is crucial for investors to partner with experienced secondary managers who possess the sourcing networks, analytical tools, and execution expertise required to navigate the complexities of SACV transactions. When executed thoughtfully, a strategic allocation to SACVs can serve as a powerful complement to a diversified secondaries portfolio—enhancing potential returns and positioning investors to capitalize on the evolving dynamics of the private equity secondaries market.
Some key manager questions for investors looking to optimize their secondary allocation include:
- Is their typical secondary fund underweight on the GP-led part of the market? If so, by how much?
- Do they have the required expertise to successfully execute GP-led deals?
- Are they capable of conducting the bottom-up underwriting required to successfully execute concentrated GP-led transactions?
- Can they speak for size and lead concentrated GP-led deals, including driving negotiations on asset selection, pricing, and other terms and conditions?
- Or will they play a syndicate investor role in these transactions where they are price and terms takers?
Connect with HarbourVest
Our strategic approach
As one of the world’s three largest secondaries managers with historically strong performance and more than $62 billion deployed over 35+ years, the HarbourVest secondary team benefits from the power and scale of the HarbourVest platform that provides access to some of the highest-quality LP-led and GP-led deal flow. We believe that offering both diversified secondary funds and continuation solutions positions HarbourVest clients to take advantage of the range of opportunities emerging in today’s secondaries market.
While many managers offer flagship funds with a clear weighting toward either LP-led or GP-led transactions, we pursue balanced weightings in our diversified secondary program because we believe this provides the best outcomes for our investors. In our concentrated, continuation solutions-oriented offering, we focus on investing in high-quality SACVs that contain a GP’s “trophy assets.” The composition of a core diversified secondary program will influence the appropriate weighting for a SACV-focused strategy, but if the core program includes a balance of LP-led and GP-led deals, we believe investors looking to generate increased alpha potential should consider implementing a 10-20% SACV allocation to mirror the overall secondary market.
- Evercore Private Capital Advisory, H1 2025 Secondary Market Review, dated July 2025, data as of June 30, 2025.
- Evercore Private Capital Advisory, FY 2024 Secondary Market Review, dated February 2025, data as of December 31, 2024.
- PJT Park Hill, FY 2023 Secondary Market Insight dated January 2024, data as of December 31, 2023.
Diversification does not ensure a profit or protect against a loss.
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