At Record Highs, Does the Secondary Market Have Room for Further Growth?

May 7, 2026

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.

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.

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.

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.

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.

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.

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.

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.

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.