Private equity secondaries are purchases of existing stakes in private funds or their assets, rather than commitments to new funds. The market splits into LP-led deals, where investors sell fund stakes, and GP-led deals, where managers move assets into continuation vehicles. Volume reached a record $225-240 billion in 2025, per Evercore and Jefferies.
For most of private equity's history, a commitment to a fund was a one-way door: capital went in, and it came back when the manager sold the companies — typically a decade later. The secondaries market exists because institutions increasingly need that door to swing both ways. In 2025 it did so at unprecedented scale: global secondary volume reached a record of roughly $225–240 billion, with Evercore's Private Capital Advisory measuring $226 billion — up 41% in a single year.
What was once a niche corner for distressed sellers has become core infrastructure for institutional portfolios. Here is how it works.
What a secondary actually is
A private equity secondary is the purchase of an existing interest in a private fund or its underlying assets, as opposed to a primary commitment to a newly raised fund. The buyer acquires the seller's position in full: its share of the portfolio's net asset value (NAV), its remaining unfunded commitments, and its rights to future distributions.
Because private fund stakes cannot be sold on an exchange, each transaction is privately negotiated — usually intermediated by specialist advisory desks at firms such as Jefferies, Evercore, PJT Partners, Lazard and Campbell Lutyens, which also publish the volume data the industry relies on.
The market divides into two distinct businesses.
LP-led secondaries: investors selling stakes
In an LP-led deal, a limited partner — a pension fund, endowment, sovereign wealth fund or insurer — sells some of its fund interests to a secondary buyer. Evercore measured LP-led volume at roughly $120 billion in 2025, up 34% year over year.
Why do sophisticated, long-horizon institutions sell long-term assets? The motivations have shifted markedly over time:
Liquidity and rebalancing. The 2022 public market drawdown left many allocators above their private equity targets — the denominator effect — while distributions from existing funds slowed as exits dried up. Selling fund stakes became the pressure valve, and that dynamic powered record volumes in the years that followed.
Portfolio management. Increasingly, LPs sell not from distress but by design: pruning tail-end funds, exiting non-core manager relationships, freeing capital to re-commit to top-conviction managers. The Chief Investment Officer trade press described 2025's record as evidence that LPs now "embrace" the market as a routine tool rather than a last resort.
Pricing has cooperated. Discounts to NAV — the historical cost of selling — have narrowed substantially for quality buyout portfolios, which in strong markets have traded close to par. Sellers no longer face the punitive haircuts of earlier cycles, which lowers the barrier to using the market proactively.
GP-led secondaries: managers extending ownership
The faster-growing half of the market is led by the fund managers themselves. GP-led volume reached roughly $106 billion in 2025, up 51% year over year, per Evercore.
The dominant structure is the continuation vehicle (CV). A GP nearing the end of a fund's life identifies one or more prized assets it does not want to sell — often its best company — and creates a new vehicle to hold them. Secondary investors capitalize the new vehicle; existing LPs choose between taking the cash (liquidity at a negotiated price) or rolling their interest into the CV. The GP keeps managing the asset, usually with reset economics and fresh capital for growth.
Continuation vehicles answer a real problem: traditional ten-year fund structures force the sale of good companies on a schedule that has nothing to do with the companies themselves. But they also embed a conflict — the GP is effectively on both sides of the transaction, selling from its old fund to its new one. Institutional buyers manage this through fairness opinions, competitive pricing processes and LP advisory committee approvals; the quality of that governance varies, and it remains the most debated aspect of the market.
Why the market is growing so fast
Several structural forces, not one cyclical story, explain the record numbers.
The liquidity gap. Private equity exits via IPOs and corporate sales have run below historical norms, while LPs' need for distributions has not diminished. Secondaries — both LP sales and continuation vehicles — fill the gap. Industry observers describe liquidity "creativity" as now rivaling capital itself in importance.
Dedicated capital has scaled. Capital raised specifically for secondaries reached a record $327 billion in 2025, up 14% from a year earlier; including traditional LP capital and available leverage, total buying power approached $477 billion. Deep capital makes the market liquid, which attracts more sellers, which attracts more capital — a classic flywheel.
The asset class has institutionalized. Semi-liquid and evergreen vehicles, many built on secondaries, have opened private equity to wealth channels that demand ongoing liquidity. Secondaries are the natural sourcing engine for those structures.
What secondaries offer the buyer
For allocators, secondaries occupy a distinct place in a private markets program:
A flattened J-curve. Buying seasoned portfolios means buying assets already past the early years of fees-without-value — the dynamic explained in our piece on the J-curve. Secondary funds typically show positive returns far sooner than primary funds.
Visibility. A primary fund commitment is a blind pool; a secondary buyer can underwrite the actual companies in the portfolio. This reduces — though never eliminates — the dispersion of outcomes.
Shorter duration and earlier cash back. Mature assets are closer to exit, so capital returns faster. For programs managing liquidity tightly, that matters.
Entry pricing. Buying at even a modest discount to NAV provides an immediate cushion, though discounts are a smaller part of the return story in today's tighter market than they were a decade ago.
The trade-offs are real, too: secondary buyers give up the highest-growth early years of a fund's value creation, pay an additional layer of fees in fund-of-funds-style structures, and in GP-led deals must underwrite the conflict dynamics described above.
What it means for large asset owners
For universal asset owners, the maturation of the secondaries market changes the character of private equity itself. Illiquidity was always the asset class's defining constraint; a deep, continuously functioning secondary market loosens that constraint without removing it. Allocation decisions become more reversible. Portfolio construction can be more active. Mistakes are less permanent.
The discipline this demands is new, however. A liquid-ish private market tempts institutions to trade what they once held, and the costs of overtrading — discounts, fees, adverse selection — compound quietly. The institutions best served by the secondaries boom will likely be those that use it the way the best already do: as a tool for deliberate portfolio management, not a substitute for commitment discipline.