What’s Behind the Continued Growth in Private Markets Secondaries?

Private markets secondaries accelerated in the first half of 2025, with global transaction volume reaching $103 billion—a 51% increase from $68 billion in H1 2024, setting a new six-month record.¹ Fueled by a mix of factors, including continued liquidity needs from LPs, a narrowing bid-ask spread, strong demand for diversified portfolios, and record levels of dedicated capital, the market's momentum in the secondary market remained strong heading into the second half of 2025.

With more LPs and GPs using secondaries for portfolio management and liquidity, understanding the evolving dynamics of the market may be crucial for advisors navigating potential opportunities in this space.

Record-Breaking Secondaries Volume Supported by Portfolio Management and Liquidity Needs

According to Jefferies, LP-led transactions totaled $56 billion and GP-led $47 billion in H1 2025 (Exhibit 1). On the LP side, buyers cited narrower bid-ask spreads and ample dedicated capital as supports as LPs sought solutions for portfolio management and liquidity amid capital constraints and slower-than-expected distributions.² GP-led activity reached a first-half record, driven largely by multi-asset continuation vehicles, expanding 68% compared to 1H 2024.³

Source: Jefferies, “H1 2025 Global Secondary Market Review,” July 2025

What might have driven this growth? Even as global IPO and M&A activity picked up in early 2025, liquidity for private-market sponsors remained constrained, limiting distributions to LPs.⁴ In turn, LPs looked to the secondary market seeking to rebalance portfolios and

Furthermore, as the market for secondaries evolves and expands, GPs and LPs alike are turning to these transactions more systematically. According to Campbell Lutyens, portfolio-management motives again outweigh pure liquidity needs in 2025, underscoring the market’s role as a portfolio-construction tool rather than just a liquidity outlet.⁵

Major Trends Shaping the Secondaries Opportunity Set

Following a record first half, consensus points to continued growth. Jefferies expects market volumes to stay on pace to exceed $210 billion annually,⁶ while Campbell Lutyens reports that nearly three-quarters of buyers expect 2025 activity to exceed $150 billion.⁷ These expectations appear to reinforce a belief in the market’s continued advance through year end.

Below we cover some of the major trends supporting increased secondaries supply and demand across private markets.

A Rise in LP-Led Secondary Market Pricing

Average LP portfolio pricing reached about 90% of NAV in 1H 2025, up from 89% a year earlier.⁸ The first half of this year also saw transaction-weighted average discounts of 13.3%, slightly wider than 2024’s 11% but lower than 2023’s 15.7%, with buyout portfolios trading around 11.6% and infrastructure and senior credit at mid-single-digit discounts.⁹

Source: Jefferies, “H1 2025 Global Secondary Market Review,” July 2025

A few factors contributed to this narrowed spread on average, including:

• Stabilizing Macroeconomic Environment: Rising public markets and interest rate cuts led to increased confidence in PE-backed companies and the future exit environment for these assets.

• Influx of Dedicated Capital: Available capital earmarked for secondaries stood near $302 billion by mid-2025,¹⁰ with $171 billion in dry powder and $218 billion in expected fundraising over the next 12 months.¹²

• Skew Toward Younger Vintages: In 1H 2025, the average age of a fund sold in the secondary market was about 7 years, with post-2017 vintages representing the majority of transaction volumes.¹³ These newer funds generally offered greater upside potential and commanded stronger pricing, as buyers favored recently underwritten, higher-quality assets.

• Focus on Higher-Quality: Pricing for buyout funds—which represented 53% of LP-led volume—maintained the highest pricing levels, averaging 94% of NAV in H1 2025.¹⁴ Buyer interest remained concentrated in mature, cash-generative assets with resilient fundamentals.

When evaluating private equity secondaries, the discount to a fund's intrinsic asset value can matter more than the discount to its last reported NAV, as long-term returns are typically driven by capital appreciation of underlying assets rather than just the initial markdown. Additionally, LP-led transactions tend to feature deeper discounts than GP-led deals, as individual investors may be more motivated to sell at a reduced price depending on their liquidity needs.

Expansion of GP-Led Transactions via Continuation Vehicles

The GP-led market continued to mature, up 72% year-over-year.15 Even as public-market dealmaking improved, liquidity for private-market investors remained constrained, prompting broader use of continuation vehicles (CVs) to provide distributions while retaining exposure to high-conviction assets.¹⁵

Multi-asset CVs gained share in the first half of 2025, accounting for roughly half of GP-led volume, while single-asset CVs represented about 38%.¹⁶ This shift marks a reversal from prior years, as sponsors increasingly packaged multiple assets into single processes, and buyers favored the diversification and efficiency these structures provide. More than half of GP-led transactions priced at or above par during H1 2025, underscoring continued competition for high-conviction assets and alignment between GPs and secondary buyers.¹⁷

Secondary investors remained selective across sectors, favoring assets with durable cash flows and resilient profitability. Technology again led GP-led activity in the first half of this year, followed by industrials and business services.¹⁸

Continued Growth of Evergreen Retail Vehicles and Increasing Deal Sizes

Perpetual or evergreen fully funded structures have begun to transform the secondary market. Approximately $16 billion was raised for evergreen pools in H1 2025, with about 60% directed to secondaries.¹⁹ Perhaps because of their need to deploy capital quickly and cater to nearer-term liquidity needs of their own LPs, these evergreen funds appeared more willing to pay premium prices for secondary stakes, further narrowing bid-ask spreads across the LP-led market.

The more diversified portfolios available in the secondary market tend to include underlying companies or assets that are closer to exit, which can potentially accelerate distributions, a feature that can be especially attractive for GPs managing these evergreen vehicles. The ability for these managers to evaluate existing portfolios with more upfront information can also help them better manage risk—which may be a reason secondaries strategies have experienced a lower risk profile historically compared to primary buyout strategies.

The emergence of these evergreen vehicles also coincided with a trend toward larger deal sizes and a more concentrated set of buyers at the top end of the market. Overall, according to Jefferies, the secondary market saw 56 deals exceeding $1 billion, already surpassing the 51 recorded for all of 2024.²⁰ The largest buyers continued to account for a significant share of GP-led deals, reinforcing a concentrated competitive landscape.²¹

Beyond Buyout: Emerging Infrastructure, Private Debt Secondaries Markets

Though buyout continues to dominate both GP-led and LP-led supply, secondary markets in other asset classes, especially infrastructure, grew more robust in the first half of 2025.

In infrastructure, GP-led activity has been strong, driven by momentum in energy, including renewables, as GPs look to retain their higher-cash-generating assets.²² Secondaries deals for data center strategies have also increased in line with primary opportunities in the space.

Source: Campbell Lutyens, “Secondary Market Overview Report 1H 2025,” Aug. 12, 2025

According to Jefferies, private debt and venture secondaries are also expected to expand, albeit at different paces.²⁵ Private debt followed closely behind infrastructure as a share of both GP-led and LP-led deals in 2024.²⁶ With record-setting fundraising and continued growth on the horizon across these markets, managers have established dedicated secondaries teams to underwrite deals in these emerging asset classes.²⁷

Overview of Risks Associated With Secondaries Investing

Private equity secondaries can present a compelling opportunity, but it's essential for advisors to recognize the inherent risks across asset classes. Like other private market strategies, secondary funds often acquire illiquid stakes in private companies, which most likely results in illiquidity or more limited liquidity compared to public markets.

Furthermore, the future performance of the underlying portfolio companies is not assured, meaning investors could experience partial or total capital loss. While secondary investments typically offer shorter durations, they may still face liquidity challenges, particularly if market demand for specific fund managers declines. Additionally, investors in fund-of-funds or specialized secondary funds must navigate two layers of general partners, which may introduce extra fees and expenses.